How to use the Compound Interest Calculator
- 1 Enter the starting amount, the annual interest rate and the number of years.
- 2 Optionally add a monthly deposit and choose how often interest is added.
- 3 Read the final balance, the total interest and the year-by-year overview.
Why compound interest is so powerful
Compound growth starts slowly and then accelerates. With €10,000, €200 a month and 5% interest compounded monthly, you deposit €58,000 over 20 years – but the balance grows to well over €100,000. In the last years the interest you earn each year is larger than everything you deposit.
Time matters more than amount
Starting ten years earlier often beats depositing twice as much later, because early money has more time to compound. That is why regular saving or investing from a young age is so effective.
Compounding frequency
Daily compounding earns slightly more than monthly, monthly slightly more than yearly. The differences are small at low rates, but they add up over decades – compare the effective annual rate shown under the result.
Frequently asked questions
How do I calculate compound interest?
Use A = P × (1 + r/n)^(n·t) for a lump sum. For regular deposits, each deposit compounds from the moment it is made – the calculator does this month by month.
Is daily compounding much better than monthly?
Only slightly. At 5%, monthly compounding gives an effective rate of 5.12% and daily compounding 5.13%.
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