Finance & trading
How much will savings grow with compound interest?
Final amount with starting capital, monthly contributions, annual rate and years.
Quick answer
Future value with monthly compounding: FV = P × (1 + r/12)^(12×t) + PMT × [((1 + r/12)^(12×t) − 1) ÷ (r/12)]. €5,000 start, €200/month, 6% annual for 20 years → roughly €109,000 total (€53,000 contributed, €56,000 interest).
Final amount
08,959.20
- Total contributed
- $53,000.00
- Interest earned
- $55,959.20
Simulation at a constant rate with monthly compounding. Real returns vary over time.
How it works
Compound interest means you earn returns on prior returns — the curve accelerates over time. Real investments fluctuate; this calculator assumes a constant rate. Fees, taxes and inflation reduce the real outcome — enter a net return if you want planning realism.
Automate the transfer on payday — willpower fails before compounding kicks in. Track net-of-fee assumptions in a budget planner; long-term index investing is easier to stick with after reading an index fund investing book. General guidance only — returns are hypothetical, markets fluctuate and you may lose capital; not personalised investment advice.
Look at where the money in that projection is actually created. At around seven per cent a year, capital doubles roughly every decade — which means the final ten years of a thirty-year run add about as much as the entire twenty years before them. The curve is not gently rising, it is almost flat and then steep, and that is the mechanical reason why starting five years earlier beats contributing more later, and why interrupting the plan near the end costs disproportionately. It is also why the early years feel like nothing is happening: at that stage, nothing much is.
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Frequently asked questions
Compound interest vs simple interest?+
Simple interest applies only to the principal. Compound applies to principal plus accumulated interest — growth is exponential. At 6% over 20 years, compounding roughly doubles the interest earned vs simple on the same principal and contributions.
What annual return is realistic?+
Global stock markets averaged roughly 7–10% nominal long-term before inflation; balanced portfolios 4–6%. Savings accounts and bonds are lower. Past performance does not guarantee future returns — use conservative assumptions for planning and stress-test 0% growth years.
Does contribution timing matter?+
Monthly vs annual contributions differ slightly because earlier deposits compound longer. Investing at month-start vs month-end shifts the result marginally. Consistency beats timing — start early; missing the best market days hurts less than missing years of contributions.
How does inflation affect the result?+
Subtract inflation from the nominal rate for real purchasing power. 6% return with 2% inflation ≈ 4% real growth. €109,000 in 20 years buys less than today’s €109,000 — plan in real terms for retirement goals and bump targets if prices rise faster than your return assumption.
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