Compound Interest Calculator
Calculate how a lump sum grows with compound interest. See the power of compounding over different time periods.
Enter Your Values
Using shared profile · 3,500/mo · EUR — edit on Dashboard
Results update automatically as you change values.
What-If Scenarios
Results update instantlyCost Breakdown
Growth Over Time (Nominal vs Real)
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Final Composition
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Scenario Analysis
How the outcome shifts if your assumptions turn out better or worse than expected.
You earn 2% more than expected
At your stated 7.000000000000001% rate
You earn 2% less than expected
Compare Scenarios
Pin up to 3 and see them side by sideSet your inputs, then Pin current to save this scenario. Pin a few variations to compare their scores and outcomes here.
What Moves the Needle Most
How much each factor changes your Final Amount across its full range. Time Period has the biggest impact.
Focus your attention on Time Period — getting it right matters most. Factors lower down move the result less, so rough estimates there are fine.
Confidence & Assumptions
The outcome shifts meaningfully with your assumptions. Sensible, but revisit the key inputs.
Final Amount: €16,470 (worst) → €20,097 (expected) → €24,514 (best)
These are the estimates the result depends on. Adjust them (and the Advanced inputs) to match your real situation — the closer they are to reality, the more reliable your decision.
These estimates are for informational purposes only and do not constitute financial advice. Actual results may vary based on factors not captured in this calculator.
How This Calculator Works
What this calculator does
This calculator shows how a lump sum investment grows over time when interest is reinvested, creating exponential growth.
How the calculation works
Compound interest is calculated by applying the interest rate to both your principal and previously earned interest. The formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is time in years.
Formula
A = P × (1 + r/n)^(n×t) A = Final amount P = Principal (initial investment) r = Annual interest rate (decimal) n = Compounding periods per year t = Time in years
Sources & defaults
- Historical equity risk premium literature
Long-run stock/SIP defaults ~7–12% nominal before fees/tax — not a forecast
- Eurostat / national CPI
Default inflation ~2–3% unless you override it
- Standard compound-interest formula A = P(1+r/n)^(nt)
Textbook compounding; tax applied to gains when set
Example
If you invest €10,000 at 7% annual interest compounded monthly for 10 years: A = 10,000 × (1 + 0.07/12)^(12×10) = €20,096. Your money doubles.
How to Use This Calculator
- 1Enter your numbers
Fill in the inputs for Compound Interest Calculator. Defaults are realistic starting points — replace them with your actual figures.
- 2Understand the calculation
Compound interest is calculated by applying the interest rate to both your principal and previously earned interest. The formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is time in years.
- 3Review results and scenarios
Check metrics, cost breakdown, comparison tables, and best / expected / worst scenarios. Use sliders to stress-test assumptions.
- 4Decide with the verdict
Read the decision engine recommendation and FAQ. Example: If you invest €10,000 at 7% annual interest compounded monthly for 10 years: A = 10,000 × (1 + 0.07/12)^(12×10) = €20,096. Your money doubles.
Factors to Consider
- Higher compounding frequency yields slightly more
- Even a 1% difference in rate compounds dramatically over decades
- Time is the most powerful factor — starting early matters more than the amount
- Inflation reduces real returns — subtract ~3% from your rate for real growth
Common Mistakes
- Confusing simple interest with compound interest
- Forgetting that taxes reduce effective returns
- Not accounting for inflation
- Using nominal rates instead of real rates for long-term planning
Frequently Asked Questions
What is compound interest?+
Compound interest is interest calculated on both the principal and accumulated interest. It causes exponential growth rather than linear growth.
How often should interest compound?+
More frequent compounding yields slightly higher returns, but the difference between monthly and daily is minimal. Monthly is most common for investments.
What is a good compound interest rate?+
Historically, stock markets average 7-10% annually. Savings accounts offer 1-4%. Always compare against inflation (~3%) to understand real growth.
Is compound interest taxed?+
Yes, interest income is typically taxed as ordinary income, which reduces your effective return. Tax-advantaged accounts can help.
This calculator provides estimates for informational purposes only and does not constitute financial, investment, tax, or legal advice. Always consult a qualified professional before making important financial decisions.
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