Compound interest calculator
Estimate how much your investment will grow with monthly contributions and an estimated annual return.
- Final balance
- 19,318.14
- Initial capital
- 1,000
- Total monthly contributions
- 12,000
- Interest earned
- 6,318.14
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| Year 0 | 1,000 | 0 | 1,000 |
| Year 1 | 2,200 | 111.55 | 2,311.55 |
| Year 2 | 3,400 | 317.91 | 3,717.91 |
| Year 3 | 4,600 | 625.94 | 5,225.94 |
| Year 4 | 5,800 | 1,042.98 | 6,842.98 |
| Year 5 | 7,000 | 1,576.92 | 8,576.92 |
| Year 6 | 8,200 | 2,236.2 | 10,436.2 |
| Year 7 | 9,400 | 3,029.89 | 12,429.89 |
| Year 8 | 10,600 | 3,967.71 | 14,567.71 |
| Year 9 | 11,800 | 5,060.07 | 16,860.07 |
| Year 10 | 13,000 | 6,318.14 | 19,318.14 |
How compound interest is calculated
Each month, the balance grows by applying the monthly interest rate (the annual rate divided by 12) to the current balance, and then the monthly contribution is added:
balance = previous balance × (1 + annual rate ÷ 100 ÷ 12) + monthly contribution
This process repeats every month for the number of years specified. The interest earned is the difference between the final balance and the total contributed (initial capital plus all monthly contributions):
interest = final balance − total contributed
Worked example
With an initial capital of $1,000, monthly contributions of $100, an estimated annual return of 7%, and a 10-year horizon, the final balance is around $18,000, of which about $13,000 is contributed and the rest is interest earned from the compounding effect.
Frequently asked questions
- What is compound interest?
- It's interest calculated not only on the initial capital but also on the interest accumulated in previous periods, which makes the investment grow at an increasingly faster rate over time.
- How do monthly contributions affect the result?
- Each monthly contribution is added to the balance and, from that point on, also earns its own interest, so contributing consistently significantly speeds up capital growth.
- Is the annual return guaranteed?
- No, the return you enter is an estimate you choose. Results are indicative and are not a guarantee of actual returns, which depend on the specific investment product.
- Are taxes or fees taken into account?
- No, the calculator shows gross capital growth based on the rate entered, without deducting taxes on gains or fees from the investment product.
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