Compound Interest Calculator

Calculate how your investment grows with regular contributions. Visualise year-by-year growth and identify when your returns overtake your contributions.

Principal & Interest
€10,000
€
7.0%
%
Regular contributions
€200
€
Time horizon & inflation
20 years
yrs
2.0%
%
Estimated final balance
—
Total contributed
—
Interest earned
—
Real value (inflation-adjusted)
—

Year-by-year growth

Contributed capital Accumulated interest

Year-by-year table

Year Opening balance Contributions Interest (year) Closing balance

What is compound interest?

Compound interest is the financial mechanism by which interest earned in each period is added to the principal, and that combined amount then earns further interest in the next period. This cumulative effect produces exponential growth that accelerates the longer you stay invested.

Albert Einstein is often quoted as calling it "the eighth wonder of the world". Whether or not he said it, the idea is accurate: those who understand compound interest earn it; those who don't, pay it. Index funds, pension plans and long-term savings products all rely on this principle.

The Rule of 72: when does your money double?

The Rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate and you get the approximate number of years for your investment to double.

Interest rateYears to double
4%18 years
6%12 years
8%9 years
10%7.2 years
12%6 years

How this calculator works

The calculator simulates your investment period by period, applying the chosen interest rate at the selected compounding frequency and adding regular contributions at the end of each period (ordinary annuity). The logic:

The final result is the sum of the compounded initial principal plus the future value of all contributions made throughout the investment horizon.

Worked example: £/€10,000 + £/€200/month for 20 years at 7%

Starting with £/€10,000, contributing £/€200 per month and earning 7% per year with monthly compounding over 20 years:

Extending the same scenario to 30 years pushes the final balance above €240,000, demonstrating that time is the single most powerful factor in long-term investing.

Historical market returns as a reference

When choosing an interest rate in the calculator, historical data provides useful context:

For conservative and realistic planning, a 5–7% annual return is a reasonable assumption for a diversified global index-fund portfolio. Past performance does not guarantee future results.

Last updated: June 2026. This calculator uses the standard compound interest formula with ordinary (end-of-period) annuities. For personalised financial advice, consult an independent financial adviser.

Frequently asked questions about compound interest

What is compound interest?
Compound interest means that interest earned in each period is added to the principal and that larger amount then earns interest in the next period. Unlike simple interest — which only applies to the original principal — compound interest grows exponentially over time. This is the fundamental principle behind index funds, pension plans and long-term savings accounts.
How do periodic contributions affect the final result?
Periodic contributions have an enormous impact over the long run. Contributing €200 per month for 20 years at 7% per year can result in a final balance exceeding €100,000, with roughly half being generated interest. The earlier you start and the larger the contributions, the greater the multiplier effect. Consistency beats size: small contributions over 30 years typically outperform large contributions over 10 years.
What is the difference between simple and compound interest?
With simple interest, €10,000 at 7% for 20 years earns €14,000 in interest (€700/year × 20), totalling €24,000. With annual compound interest, those same €10,000 grow to €38,697, earning €28,697 in interest — nearly twice as much. The difference comes from reinvesting interest so that it earns further interest on itself.
What is compounding frequency?
Compounding frequency is how many times per year interest is calculated and added to the principal. With annual compounding at 7%, the growth factor is 1.07. With monthly compounding it is (1 + 0.07/12)^12 ≈ 1.0723. The higher the frequency, the slightly higher the final balance — although the difference between monthly and daily compounding is minimal in practice.
How does inflation affect my investment?
Inflation erodes purchasing power. If your investment grows at 7% per year but inflation is 3%, your real return is roughly 4% (exact: (1.07/1.03) − 1 ≈ 3.88%). This calculator shows the inflation-adjusted real value alongside the nominal figure so you can see what you are genuinely gaining in purchasing-power terms.
What is a realistic annual return to use?
The S&P 500 has returned roughly 10% per year nominally (about 7% real after inflation) over the past 100 years. Global equity index funds are commonly used as benchmarks. Conservative investments like government bonds or savings accounts typically yield 2–4%. A 5–7% annual return is a reasonable and conservative assumption for a diversified index-fund portfolio. Past performance does not guarantee future results.
What is the Rule of 72?
The Rule of 72 lets you estimate how many years it takes for an investment to double: divide 72 by the annual interest rate. At 6%, your money doubles in roughly 12 years (72 / 6 = 12). At 9%, it doubles in about 8 years (72 / 9 = 8). It is a quick mental shortcut for comparing investment options without a calculator.