Compounded Weekly Calculator
This calculator helps you determine the future value of an investment or savings account when interest is compounded weekly. Weekly compounding means that interest is calculated and added to the principal 52 times a year, leading to faster growth compared to less frequent compounding periods.
Results:
Future Value:
Total Interest Earned:
function calculateCompoundedWeekly() {
var principalAmount = parseFloat(document.getElementById('principalAmount').value);
var annualRate = parseFloat(document.getElementById('annualRate').value);
var timeYears = parseFloat(document.getElementById('timeYears').value);
// Check for valid inputs
if (isNaN(principalAmount) || isNaN(annualRate) || isNaN(timeYears) || principalAmount < 0 || annualRate < 0 || timeYears < 0) {
document.getElementById('futureValueResult').innerHTML = 'Please enter valid positive numbers for all fields.';
document.getElementById('totalInterestResult').innerHTML = '';
return;
}
var rateDecimal = annualRate / 100;
var compoundingFrequency = 52; // Weekly compounding
// Compound Interest Formula: A = P(1 + r/n)^(nt)
var futureValue = principalAmount * Math.pow((1 + rateDecimal / compoundingFrequency), (compoundingFrequency * timeYears));
var totalInterest = futureValue – principalAmount;
document.getElementById('futureValueResult').innerHTML = '$' + futureValue.toFixed(2);
document.getElementById('totalInterestResult').innerHTML = '$' + totalInterest.toFixed(2);
}
// Calculate on page load with default values
window.onload = calculateCompoundedWeekly;
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Understanding Compounded Weekly
Compounding is the process where an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. When interest is compounded weekly, it means that the interest earned on your principal amount is calculated and added to your balance 52 times a year. This frequent addition of interest to the principal means that your money starts earning interest on the previously earned interest much faster than with less frequent compounding periods (like monthly, quarterly, or annually).
The Power of Weekly Compounding
The more frequently interest is compounded, the faster your investment grows, assuming all other factors (principal, annual rate, and time) remain constant. Weekly compounding offers a significant advantage over annual or even monthly compounding because it maximizes the effect of earning "interest on interest." Over long periods, this difference can lead to substantially higher returns.
Formula for Compounded Weekly Interest
The formula used for calculating compound interest is:
A = P (1 + r/n)^(nt)
A = the future value of the investment/loan, including interestP = the principal investment amount (the initial deposit or loan amount)r = the annual nominal interest rate (as a decimal)n = the number of times that interest is compounded per year (for weekly compounding, n = 52)t = the number of years the money is invested or borrowed for
How to Use the Calculator
- Principal Amount: Enter the initial amount of money you are investing or saving. For example, if you start with $10,000, enter '10000'.
- Annual Nominal Rate: Input the annual interest rate as a percentage. If the rate is 5%, enter '5'. The calculator will convert this to a decimal for the calculation.
- Time Period (Years): Specify the number of years you plan to keep the money invested. For instance, for 10 years, enter '10'.
- Click "Calculate" to see the future value of your investment and the total interest earned.
Example Scenario:
Let's say you invest an initial principal of $5,000 at an annual nominal rate of 4%, compounded weekly, for a period of 5 years.
- Principal (P): $5,000
- Annual Rate (r): 4% (or 0.04 as a decimal)
- Compounding Frequency (n): 52 (weekly)
- Time (t): 5 years
Using the formula:
A = 5000 * (1 + 0.04/52)^(52*5)
A = 5000 * (1 + 0.00076923)^(260)
A = 5000 * (1.00076923)^260
A ≈ 5000 * 1.22139
A ≈ $6,106.95
The future value of your investment would be approximately $6,106.95, with total interest earned of $1,106.95.
This calculator provides a quick and easy way to visualize the growth of your investments with the benefit of weekly compounding.