How compound interest works
With compound interest, the interest you earn is added to the principal and starts earning interest itself. That's why growth speeds up over time. Without contributions, the formula is Final amount = Initial amount × (1 + r ÷ n)n × years, where r is the annual rate and n the compounding periods per year. For example, 1,000 at 5% a year for 10 years becomes about 1,629.
With monthly contributions
Enter the starting amount, what you add each month, the annual rate and the years. With 5,000 to start, 200 a month, 7% a year compounded monthly and 10 years, the final balance is around 44,665: you would contribute 29,000 and the interest would be about 15,665. You'll also see the year-by-year evolution in the table and the chart.
What to keep in mind
- It's a simulation with a constant rate: real investments fluctuate and can lose value.
- It doesn't include inflation, fees or taxes, which reduce the real return.
- The earlier you start and the longer you stay invested, the more the compounding effect counts.
This tool is informational only and is not financial advice. To see what a loan would cost you, use Loan Calculator.
Frequently Asked Questions
What is the compound interest formula?
Final amount = Initial amount × (1 + r ÷ n)^(n × years). With regular contributions, each deposit also earns its own interest.
What's the difference between monthly and yearly compounding?
The more often interest is compounded, the slightly larger the final result at the same annual rate.
Is it the same as a guaranteed return?
No. It's a simulation with a constant rate; real investments can vary and lose value.
Can I change the currency?
Yes. Type the symbol you prefer in “Currency symbol”; the calculation doesn't depend on the currency.