Compound interest calculator

Calculate your compound interest

What is compound interest

Compound interest is the interest earned not only on your money, but also on the interest you have already earned. Instead of growing in a straight line, your capital grows faster and faster, because each year the interest starts from a bigger base. That is why it is called «interest on interest»: the effect is small at first and enormous over the long run.

The gap with simple interest (always calculated on the initial capital) becomes huge over many years. Time is the most powerful variable in the formula: starting earlier usually matters more than contributing a lot.

The compound interest formula

For an initial capital C at an annual rate i over n years, the final value is C × (1 + i)ⁿ. If you also make periodic contributions (the usual case when you save every month), you add the future value of those contributions. This calculator does exactly that: it compounds your capital and each contribution monthly, so you see the real effect of saving little by little.

An example that makes it clear

You add €100 a month for 30 years at an annual rate of 7%. You will have put in €36,000 of your own money… but the total would be around €120,000: more than €80,000 is interest. Change the numbers above or tap one of the quick examples and see for yourself.

Simple vs compound interest

With simple interest, interest is always calculated on the initial capital and is not reinvested. With compound interest, each year's interest is added to the capital and starts earning more interest. Over a few years the gap is small; over the long run it is enormous. Example with €10,000 at 7% a year, with no contributions:

Over 30 years, compound interest more than doubles the result of simple interest with exactly the same money. That is why starting early and staying invested matters so much.

Compound interest and periodic investing (DCA)

The most common way to harness compound interest without obsessing over the entry point is periodic investing or dollar-cost averaging (DCA): adding a fixed amount every month, no matter what. It is not about timing the market, it is about being consistent. In GrandAlpha you can declare your long-term strategy and track your Consistency Index: how well you keep your plan, month by month.

What the formula does not tell you

A calculator assumes a constant rate, but real market returns are not: there are good, bad and very bad years, and along the way there can be drops of 30% or 40%. It also ignores taxes, fees and inflation. Use it to understand the power of time and consistency, not as a forecast of what you will earn. Before investing, understand the risk: past performance does not guarantee future results.