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Savings and Investment Calculators

Compound Interest Calculator

Work out how your money grows with compound interest: enter the starting amount, the monthly contribution, the annual interest rate and the term, and see the future value with a year-by-year breakdown.

Future value
€17,175
Total invested
€13,000
Interest earned
€4,175

After tax and inflation

Net, tax only on redemption
€17,175
Net, tax every year
€17,175
Today's purchasing power
€14,090

Deferring the tax to redemption is worth €0 in this scenario: an accumulating fund withholds nothing along the way, while a term deposit withholds the rate from every interest credit and that slice stops compounding.

Today's purchasing power applies 2% of annual inflation to the net value with tax every year. Inflation is an editable assumption (the ECB target), not a forecast.

Year-by-year breakdown

YearInterestBalance
1€79€2,279
2€224€3,624
3€437€5,037
4€722€6,522
5€1,084€8,084
6€1,525€9,725
7€2,051€11,451
8€2,665€13,265
9€3,371€15,171
10€4,175€17,175

Educational estimate, not financial advice. Returns are not guaranteed.

Video: how to use the calculator

1

What compound interest is

Compound interest is interest calculated not only on the starting capital but also on the interest already accrued. Each period, the interest earned is added to the balance and starts earning interest itself, which is why growth accelerates over time and why the term matters as much as the rate.

2

How this tool calculates

The calculator compounds monthly: it converts the annual rate into an equivalent monthly rate, adds each month of contributions, and accrues interest on the whole balance. The result shows the future value, the total you contributed, and the interest generated, plus a year-by-year breakdown.

3

Why the term matters more than it looks

The acceleration is not linear. In the early years almost all of the balance is money you put in; in the final years most of it is interest. Doubling the term does not double the result, it multiplies it. That is why starting early, even with small amounts, usually beats contributing heavily for a short period.

4

What it does not include

The figure is gross: it does not deduct tax on savings income, product fees, or the effect of inflation on your purchasing power. The return you enter is your own assumption, not a market promise, and markets do not deliver the same figure every year.

Worked example

Example: with €10,000 to start, €100 a month and a 5% annual rate over 20 years, the future value is around €68,000. About €34,000 of that is your own contributions and the rest is interest generated by compounding. Keeping the same plan for 30 years takes the future value to roughly €128,000 on €46,000 contributed: ten extra years add more interest than the first twenty combined.

Frequently asked questions

What is the difference between simple and compound interest?
With simple interest, interest is always calculated on the starting capital alone. With compound interest, the interest is reinvested and earns interest too. Over short terms the gap is small; over twenty or thirty years it becomes very large.
How often does this calculator compound?
Monthly. That is the usual convention for savings plans with monthly contributions. Annual compounding would give a slightly lower result, because the interest would take longer to start earning interest of its own.
Does the result account for tax?
No, the result is gross. In Spain, savings income is taxed within the IRPF savings base (base del ahorro) at progressive rates that depend on the amount earned. Check your own position with the Agencia Tributaria or an adviser, since the applicable rate depends on your circumstances.
What annual return is reasonable to assume?
It depends on the product and the risk you take. A deposit offers a guaranteed but low rate; a diversified portfolio of index funds has historically averaged more, but with negative years along the way and no guarantee of repeating them. The sensible approach is to test several assumptions and compare scenarios rather than settle on one optimistic figure.
How does inflation affect the result?
The calculator shows nominal euros. If inflation averages 2% a year, €100 twenty years from now will buy considerably less than it does today, even though the number is bigger. To think in purchasing power, subtract expected inflation from the interest rate for an approximate real return.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: