Compound interest adds interest or returns from an earlier period to the principal used for a later calculation. For a deposit that compounds under the account’s terms, the result follows the stated rate and compounding schedule. Risky investments do not have a fixed return and can lose value, so a formula is not a promise of investment performance.
A simple formula
If an amount P grows at a constant annual rate r for n years, with no additional deposits or withdrawals, the formula is future value = P × (1 + r)n. This is a mathematical example; it excludes tax, fees, inflation, and investment volatility.
Why actual results differ
- Actual returns change over time rather than staying constant every year.
- Fees, taxes, and withdrawals reduce the amount that can compound.
- Inflation means a future balance may buy less than the same amount today.
- Regular contributions change the cash flows and calculation method.
Use the formula to understand time and assumptions, not to forecast a fund or stock return. If you invest regularly, read how dollar-cost averaging works and review risk before choosing a fund with our beginner’s guide to mutual funds.
Further reading
- Stock Exchange of Thailand: interest and compound-interest calculations
- Stock Exchange of Thailand: investment risk
Updated 16 October 2026. The example is a mathematical illustration, not an investment forecast or recommendation.
The linked Short mentions ten dividend funds but does not include fund names or selection criteria in the available reference. It is included as investment context, not as a buy or sell recommendation.