Compound Interest Calculator
See what a starting amount and a monthly contribution grow to, and how much of it is interest.
What this calculates
Compound interest is interest earning interest. Simple interest pays the same amount every year on the original sum; compound interest pays on the balance, which includes everything it has already paid you. Early on the difference is small. Given enough years it is most of the answer. This calculator adds your contribution at the end of each month and credits interest at the end of each compounding period, on the balance that was there at the start of that period. Money paid in during a period therefore starts earning at the next one — the cautious assumption. Other calculators pay interest on contributions the moment they arrive and will quote a slightly larger figure for the same inputs.
Formula
period rate = yearly rate ÷ 100 ÷ periods per year
(periods per year: monthly 12, quarterly 4, yearly 1)
for each month:
balance = balance + monthly contribution
at the end of a period:
balance = balance + (balance at period start × period rate)
total paid in = starting amount + contribution × months
interest earned = final balance − total paid in Example
Start with €10,000, add €500 a month, and assume 7% a year compounded monthly. After 10 years the balance is €106,639.02. You paid in €70,000 of that — the other €36,639.02 is interest, more than three times the amount you started with.
Frequently asked questions
Why does this differ from other compound interest calculators?
Almost always because of when contributions start earning. This tool pays interest on the balance at the start of each period, so a contribution made during the period earns from the next one. Sites that credit interest on contributions immediately show a slightly higher balance — usually a fraction of a per cent over ten years. Check the small print before comparing two answers.
Does compounding more often really matter?
A little. €10,000 plus €500 a month at 7% for 10 years comes to €106,639 compounded monthly, €105,867 quarterly and €102,570 yearly. The rate and the number of years move the answer far more than the frequency does.
Is the interest rate the same as investment returns?
No. A savings rate is contractual; an investment return is an average of good and bad years and is not guaranteed. Using 7% here shows what a steady 7% would do, not what any particular fund will do.
Does this account for inflation, tax or charges?
No — the figure is before all three. If you want the answer in today's money, enter the return minus expected inflation: 7% growth with 2% inflation means entering 5%.