Compound interest calculator

For a capital with no contributions, C × (1 + i)ⁿ: capital times one plus the interest per period, raised to the number of periods. If you also contribute monthly, you add A × ((1 + i)ⁿ − 1) / i, the formula for a regular annuity. This calculator applies both at once with monthly compounding, so i is the annual interest divided by twelve and n the number of months.

Every month. We take the annual interest you enter, divide it by twelve and apply it month by month on the accumulated balance. It's the most common scenario in saving and regular investing. If your product compounds once a year, the real result will be slightly lower than what you see here.

The one you estimate, and there's no correct figure we can give you: it depends on where the money is and the risk you take, and no future return is guaranteed. What's useful is running two or three scenarios — a cautious one, a middling one and an optimistic one — and seeing how much the result changes. If the decision only works in the optimistic scenario, it isn't a good decision.

The rule of 72 gives a quick approximation: divide 72 by the annual interest and you have the years. At 5%, about 14.4 years; the exact calculation with monthly compounding gives 13.9. The rule falls short with high rates, but for a mental estimate without a calculator it works well.

Start, but not for the reason usually given. The line that '€50 a month today is worth more than €200 when you earn more' doesn't add up: €50 a month for 40 years gives around €76,300, and €200 a month for 30 gives €166,500. The amount weighs more than ten years of head start. What is true is the other thing: with the same amount, every year of getting ahead is worth a great deal. So start with what you can sustain and raise it when you can — the two add up, and neither replaces the other.

The years, by a distance. Of the three ingredients — time, consistency and return — the return is the only one you don't control, and chasing an extra point while taking on risk you don't understand usually ends up worse than starting earlier and not stopping. Try it yourself in the calculator: raise the interest by a point and then, instead, add five years. The years almost always win.

No. The figure you see is in nominal euros, without discounting the loss of purchasing power. If you want to see it in today's euros, subtract the inflation you expect from the interest you enter: with a nominal 5% and 2% inflation, enter 3% and the result will be roughly what that money will buy in the future.

They aren't subtracted either, and it's worth bearing in mind because fees do exactly what compound interest does but against you: they're charged every year on the total built up, not on what you contributed. A simple way to approximate it is to subtract the annual fee from the interest you enter.

They aren't included. In Spain savings income is taxed in the personal income tax when you realise it, at banded rates that depend on the amount and that have been changed in the past. Since the treatment varies a lot by product and by moment, it's better to check it with the tax authority or with a tax adviser than to trust a figure read on a website, including this one.

With simple interest the interest isn't reinvested: only the money you contribute yourself earns. With compound interest it stays inside and earns in turn. With €1,000 initial, €100 a month, 5% and 20 years, simple interest would give around €38,050 and compound €43,816: almost €5,800 of difference without contributing a euro more.

It's free and there's no need to sign up or leave your email. We're not going to send you to any broker or any product either: we don't take a commission from anyone. If it's useful and you want to actually track your contributions, mPF is free too.