Investment Calculator

How compound interest works

Compound interest reinvests the returns you earn: each period you earn a return on both your original capital and the accumulated interest. The effect amplifies over time and is further boosted by regular contributions. Example: €10,000 invested for 20 years at 7% per year grows to approximately €38,700 — without any additional contributions.

How to read the result

The final value includes your initial capital, all contributions made, and the interest generated. The multiplier shows how many times you have grown the total amount invested. Check the 'Contributions vs. interest' chart: over long horizons, interest typically exceeds total contributions — that is compound interest in action.

Important limitations

The return you enter is an assumption, not a guarantee. Real returns vary year to year and can be negative. This calculator does not account for inflation, capital gains tax, or management fees. Results are illustrative for comparing scenarios, not a projection of what you will actually receive.

Frequently asked questions

What is the difference between monthly and annual compounding?

With monthly compounding, interest is calculated and reinvested every month; with annual compounding, only once a year. More frequent compounding produces a slightly higher final value for the same nominal rate, though the difference is small at typical rates.

When should I use the historical reference returns?

They are for context only. They reflect historical average returns of well-known indices — they do not predict what you will earn. Use them to judge whether the rate you are testing is reasonable, not as a performance promise.

Are monthly contributions added at the start or end of each month?

At the start of each period, which slightly maximises the result compared to end-of-month contributions. This is the standard convention for systematic savings plans.