Compound Interest Calculator: Simulate Your Future Capital

This calculator lets you simulate the growth of your capital based on an interest rate and a term. These compound interest calculations help you visualize the growth of your investment over time.

What is compound interest?

Compound interest is a fundamental financial principle: unlike simple interest, it is calculated not only on your initial capital, but also on all the interest you have already earned.

Concrete example: If you invest $1,000 at 5% per year, in the first year you earn $50 in interest. In the second year, the calculation is based on $1,050 (and no longer $1,000), earning you $52.50. This is what is called "earning interest on your interest".

The compound interest formula

The basic formula for calculating compound interest is:

C_final = C_initial × (1 + r)ⁿ

• C_initial: the starting capital
• r: the annual interest rate (e.g. 5% = 0.05)
• n: the number of years

Example: $1,000 invested at 5% for 10 years → 1,000 × (1.05)¹⁰ = $1,628.89, i.e. $628.89 in interest earned without any additional effort.

Details of the compound interest calculations

By pressing the Details button, you can see the detailed steps of the compound interest calculation, including the monthly contributions and the accumulation of interest over time.

Advanced features

Contributions at the start or end of the month ➧

By default, your monthly contributions are considered to be made at the end of the month. Enable the Contributions at the start of the month option if you save at the very beginning of the month instead: each contribution then benefits from an extra month of interest, which slightly increases the final capital.

Inflation adjustment ➧

Enter an estimated annual inflation rate to see the capital in today's purchasing power: that is, what your final capital would be worth once monetary erosion is taken into account, so you can compare future and present sums on a fair basis.

Chart and year-by-year table ➧

The Chart and year-by-year table button automatically generates a chart of your capital's growth, along with a detailed table: cumulative invested capital, total capital value and cumulative interest, for each year of the simulated period. Ideal for concretely visualizing the snowball effect of compound interest over time.

Table

Chart

Calculator vocabulary

• Starting capital: The initial amount on which the interest is calculated.
• Average rate %: The annual interest rate applied to your capital.
• Term (years): The period over which the interest is calculated, usually expressed in years.
• Contributions (month): The monthly contributions you plan to add to your capital.
• Accumulated capital: The total amount of your capital after the specified period, including the interest earned.
• Interest earned: The total amount of interest earned during the period.
• Total return: The total gain percentage compared to the invested capital.
• Initial amount: The starting amount on which the interest is calculated.
• Total contributions: The sum of all the contributions made during the period.
• Gain on initial capital: The amount of interest earned on the initial capital.
• Gain on contributions: The amount of interest earned on the contributions made.
• Effective monthly rate: The effective monthly interest rate, derived from the annual rate.
• Contributions at the start of the month: Indicates whether the monthly contribution is made at the beginning (rather than the end) of each month, giving it one extra month of interest.
• Annual inflation %: The estimated annual inflation rate, used to calculate the capital in today's purchasing power.
• Capital in today's purchasing power: The accumulated capital, expressed in today's dollars once inflation is deducted.

Why use a compound interest calculator?

A compound interest calculator lets you simulate different investment scenarios by adjusting the initial capital, the interest rate and the term. It helps you visualize the impact of compound interest on your savings and make financial decisions.

By using this calculator, you can better understand how compound interest works.

Frequently asked questions about compound interest

What is the difference between simple and compound interest?

With simple interest, the calculation is made only on the initial capital. With compound interest, the interest is added to the capital at each period and itself earns interest. Over the long term, the gap is considerable.

How often is compound interest compounded?

It depends on the investment. Some products compound interest annually, others monthly or even daily. The higher the frequency, the greater the final return.

What rate should I use in the calculator?

Enter the average annual rate of your investment (e.g. 4-5% for a high-yield savings account, 7-8% for a historical long-term stock portfolio). The calculator automatically converts this rate into an effective monthly rate.

Do monthly contributions really make a big difference?

Yes, significantly. Adding even a small regular monthly contribution multiplies the effect of compound interest, because each contribution also starts earning interest as soon as it is deposited.

Keyboard shortcuts and saving

You can save your simulations by clicking Save (or f) to find them in the history.

c ⇝ Calculate  |  h ⇝ Details  |  f ⇝ Save  |  m ⇝ Clear