Compound interest calculator
Enter your starting capital, your periodic contribution, the interest rate and the number of years, and this compound interest calculator shows you the final balance, how much you'll have contributed and how much interest you'll have earned, with a year-by-year chart and table.
Inputs
Result
Final balance
138.261,51 €
- Total contributed
- 40.000,00 €
- Interest earned
- 98.261,51 €
What is compound interest
Compound interest is the interest you earn not only on your initial money, but also on the interest you've already accumulated. Instead of withdrawing your returns, they're reinvested and become part of the capital, so in the next period they in turn generate more interest. That constant reinvestment is what sets compound interest apart from simple interest, which is always calculated on the initial amount.
The effect is modest at first and very noticeable over time: the longer the horizon, the more weight interest-on-interest carries. That's why the timeframe is one of the most decisive variables in this compound interest calculator, alongside the interest rate and the periodic contribution you choose to keep up year after year.
The compound interest formula
The classic compound interest formula, without periodic contributions, relates the final capital to the initial capital, the interest rate, the number of times it compounds per year and time:
A = P · (1 + r/n)^(n·t)
Where A is the final accumulated capital, P is the initial capital you put in at the start, r is the annual interest rate as a decimal (7% is 0.07), n is the number of times interest compounds each year (12 if monthly, 1 if annual) and t is the number of years. The exponent n·t is the total number of compounding periods, and that's where the power of compound interest lies.
How this tool calculates it
The formula above describes a single amount of capital growing untouched. In practice almost nobody invests just once: the usual approach is to start with an initial amount and keep adding periodic contributions. That's why this calculator goes beyond the simple formula and projects the balance period by period, first applying interest to the accumulated balance and then adding your contribution, whether monthly or annual.
The result keeps your own contributions separate from what the interest has generated at all times, and shows it year by year in the chart and the table so you can see where the interest portion starts to take off. You can adjust the compounding (monthly or annual) in the advanced options; the more often it compounds, the slightly larger the result.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is always calculated on the initial capital, so you earn the same amount each period. Compound interest reinvests the interest, which in turn earns more interest; over the long run the gap between the two grows dramatically.
What is monthly or annual compounding?
It's how often interest is added to the capital. With monthly compounding interest accrues twelve times a year and starts earning sooner; with annual compounding it's added just once a year. At the same rate, compounding more often gives a slightly larger result.
Does it account for taxes and inflation?
No. The calculator shows the gross balance with a constant interest rate. Returns are usually taxed and inflation erodes purchasing power, so the real value of what you get will be lower than the projected figure.
Is this a promise of returns?
No. It's an educational tool that illustrates the mechanics of compound interest with a fixed rate you choose. It doesn't recommend any product or guarantee results: the real return on any saving or investment fluctuates, isn't assured and can be negative.
If what you want is to project how much you'll save with a steady monthly contribution and see the final balance directly, try the savings simulator too.
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Get started for freeInformational and indicative content: it is not financial advice or an investment recommendation. We explain how the numbers work so you can decide for yourself; for important decisions, consult a professional.