Compound interest calculator
What a starting amount plus a monthly contribution grows into, year by year. Choose how often interest is added, raise your savings each year, and see the result in today's money.
| Year | Put in | Interest | Total interest | Balance |
|---|---|---|---|---|
| 1 | €2,400.00 | €311.58 | €311.58 | €7,711.58 |
| 2 | €2,400.00 | €450.31 | €761.89 | €10,561.89 |
| 3 | €2,400.00 | €596.14 | €1,358.03 | €13,558.03 |
| 4 | €2,400.00 | €749.43 | €2,107.45 | €16,707.45 |
| 5 | €2,400.00 | €910.56 | €3,018.01 | €20,018.01 |
| 6 | €2,400.00 | €1,079.93 | €4,097.94 | €23,497.94 |
| 7 | €2,400.00 | €1,257.97 | €5,355.91 | €27,155.91 |
| 8 | €2,400.00 | €1,445.12 | €6,801.03 | €31,001.03 |
| 9 | €2,400.00 | €1,641.84 | €8,442.87 | €35,042.87 |
| 10 | €2,400.00 | €1,848.63 | €10,291.50 | €39,291.50 |
How the calculation works
The balance is built month by month. Each month the current balance grows by one twelfth of the year's effective growth, and the contribution for that month is added, either before the interest is calculated or after it, depending on what you chose. Once a year the rows in the table are closed off and, if you asked for it, the contribution is raised.
For a single lump sum with no contributions this is exactly the textbook formula A = P × (1 + r/n)^(n×t), where P is the starting amount, r the yearly rate, n how many times a year interest is added and t the number of years. With contributions there is no neat formula that also handles a yearly raise and odd months, which is why this calculator simulates rather than approximates.
Two things most calculators get wrong
The timing of the contribution. Paying at the start of the month means every contribution earns one more month of interest than paying at the end. Over thirty years at 6% that is a difference of about half a percent of the final balance. Small, but it is your money, so it is a setting here rather than an assumption.
The effective rate. A savings account that pays 5% compounded daily really pays 5.13% a year. One that compounds yearly pays 5.00%. Both advertise 5%. The line under the result shows the effective yearly rate so two accounts can be compared honestly.
A worked example
5,000 to start, 200 a month at the end of the month, 5% compounded monthly, for ten years: the balance ends at about 39,300. You put in 29,000 of that, and the remaining 10,300 is interest. Raise the contribution by 3% a year and the balance ends nearer 42,900.
What the table shows
- Put in: the contributions made during that year, not counting the starting amount.
- Interest: what the account earned during that year.
- Total interest: everything earned so far.
- Balance: what is in the account at the end of that year.
Common questions
What is compound interest?
Interest that is paid on the interest you already earned, not only on the money you put in. The first year 5% on 10,000 is 500. The second year it is 5% on 10,500, which is 525. That extra 25 is compounding, and over decades it becomes most of the balance.
How is the monthly contribution handled?
Each contribution is added in the month it is made and earns interest from then on. Choose whether it lands at the start of the month, so it earns that month too, or at the end. Most savings plans take the money at the start.
What does the compounding frequency change?
How often the interest is added to the balance. Daily compounding at 5% gives an effective 5.13% a year, monthly gives 5.12%, yearly gives exactly 5%. The calculator shows the effective rate under the result so you can compare accounts that advertise the same headline rate.
Why can I raise the contribution every year?
Because incomes rise and a plan that stays flat for twenty years is not the plan anyone follows. Set 3% and a 200 a month contribution becomes 206 in year two, 212 in year three, and so on, on each anniversary.
What does the inflation field do?
It shows the final balance in today's purchasing power. 100,000 in twenty years at 2% inflation buys what about 67,000 buys now. The nominal figures in the table stay as they are; only the extra line under the result is adjusted.
Does this account for tax on the interest?
No. Tax on savings interest differs by country and by account type, and in many places part of it is exempt. Enter the rate you expect to keep after tax if you want an after-tax picture.
Can I share a calculation?
Yes. Every figure you enter is kept in the page address, so copying the link from your browser sends the exact calculation to somebody else.
A free tool by Billr, invoicing software for small businesses. No account needed, nothing is stored.