Compound Interest Calculator
Compound interest means earning returns on your returns. Enter a starting amount, a monthly contribution and an expected annual return — the result and chart update as you type.
How the calculation works
The calculator compounds monthly: each month your contribution is added and the whole balance grows by one twelfth of the annual return. The formula for the future value of the starting sum is FV = P × (1 + r/12)12t, and monthly contributions each compound from the month they are invested.
What return should I assume?
Nobody knows future returns. Broad global stock indexes have historically returned roughly 6–8% per year on average over long periods, before inflation — which is why 7% is a common default assumption. For a more cautious plan, run the numbers at 5% as well. Remember that real portfolios do not grow in a straight line: the average hides large swings in both directions.
The lesson hiding in the numbers
Try the same monthly amount over 10, 20 and 30 years. The final value doesn't just double or triple — the last decade does most of the work, because by then your returns are earning returns. This is why starting early, even with small amounts, beats waiting until you can invest more. When you're ready to put this into practice, see our broker comparison and the best ETFs for European investors.
A worked example
Say you start with €1,000 and invest €200 every month at a 7% average annual return. After 10 years you have put in €25,000 and the portfolio is worth about €36,000. After 20 years you have put in €49,000 — but the portfolio is worth about €108,000. In the second decade your contributions barely doubled, while the portfolio tripled: that gap is compounding, and it keeps widening every year you stay invested. Run your own numbers above and watch the two lines in the chart pull apart.
Frequently asked questions
How often is interest compounded here?
Monthly, which matches how most people invest (a monthly purchase into a fund). The difference between monthly and annual compounding at typical market returns is small — a few tenths of a percent per year — and far less important than the return itself, the fees you pay, and how long you stay invested.
Does the calculation include inflation or taxes?
No — results are nominal and gross. As a rule of thumb, subtract roughly 2% from your assumed return to think in today's purchasing power (or check the effect with the inflation calculator), and remember your country taxes investment gains when you eventually sell.