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Compound Interest Calculator

Calculate the compound interest effect on your wealth. Visualize exponential growth, compare with simple interest, and understand the power of compound interest.

Available

Inputs

Enter values

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Initial capital

€

The amount initially invested.

Regular savings rate

€

Optional regular deposit.

Savings interval

How often is the savings rate deposited?

Interest rate p.a.

Annual nominal interest rate.

Duration in years

Investment period in full years.

Compounding frequency

How often is interest credited and compounded?

Load example

For illustration only – your own calculation is what counts.

Explanation

How Compound Interest Calculator works

The compound interest calculator shows how your wealth grows exponentially through the compound interest effect. Unlike simple interest, where only the initial capital earns interest, compound interest also compounds the previously credited interest in the following period.

Compound interest formula (lump-sum investment)K_end = K₀ × (1 + r/n)^(n × t)

K0 is the initial capital, r the annual interest rate as a decimal, n the compounding frequency per year, and t the duration in years. The result grows exponentially with the duration.

Simple interest (for comparison)K_end = K₀ × (1 + r × t)

With simple interest, capital grows only linearly. The difference to the compound interest result is the compound interest effect — it shows how much additional wealth is created by compounding.

The compound interest effect unfolds its full power over long durations. In the first years, the difference to simple interest is small, but as time passes, the gap grows ever faster — that is the exponential nature of compound interest.

Knowledge

The Rule of 72

Rule of thumb for quickly estimating the doubling time with compound interest.

The Rule of 72 is a simple rule of thumb for the compound interest effect: divide 72 by the annual interest rate, and you get the approximate number of years until your capital doubles. The rule works best for interest rates between 2% and 15%.

At 3% interest: 72 / 3 = 24 years until doubling.
At 6% interest: 72 / 6 = 12 years until doubling.
At 9% interest: 72 / 9 = 8 years until doubling.
At 12% interest: 72 / 12 = 6 years until doubling.
The exact formula is: t = ln(2) / ln(1 + r) = approx. 0.693 / r.
The Rule of 72 slightly overestimates the time at high interest rates — for the Rule of 115 (tripling), use: 115 / interest rate.

Practice

Practical examples

For illustration only – your own calculation is what counts.

Lump-sum EUR 10,000, 5% p.a., 20 years

EUR 10,000 is invested as a lump sum at 5% annual compounding for 20 years. How strong is the compound interest effect?

Result: After 20 years, capital grows to approx. EUR 26,533. The compound interest effect adds approx. EUR 6,533 more than simple interest.

Monthly saving: EUR 200/month, 6% p.a., 30 years

EUR 200 monthly are saved at 6% monthly compounding over 30 years. How does compound interest work long-term?

Result: After 30 years, a wealth of approx. EUR 200,903 is created (monthly compounding). Own deposits total only EUR 72,000 — the majority comes from the compound interest effect.

Comparison: Compound vs. simple interest

EUR 10,000 is invested at 8% for 25 years. How large is the difference between compound and simple interest?

Result: With compound interest, EUR 10,000 grows to approx. EUR 68,485. With simple interest, it would be only EUR 30,000 — the compound interest effect is approx. EUR 38,485.

EUR 10,000 at 3% p.a., 20 years€18,061.11

EUR 10,000 at 5% p.a., 20 years€26,532.98

EUR 10,000 at 7% p.a., 20 years€38,696.84

Quarterly compounding with savings rate

EUR 5,000 initial capital plus EUR 100 monthly at 4% quarterly compounding over 15 years.

Result: The final capital is approx. EUR 33,666. Of that, EUR 23,000 are own deposits and approx. EUR 10,666 is interest earned through the compound interest effect.

Annual compounding€33,470.42

Quarterly compounding€33,665.87

Monthly compounding€33,710.56

Start early vs. start late with higher rate

Person A saves EUR 100/month at 6% for 30 years from today. Person B starts in 10 years with EUR 200/month at 6% for 20 years. Who has more at the end?

Result: Person A (EUR 100/month, 30 years, monthly compounding): approx. EUR 100,452 (EUR 36,000 deposited). Person B (EUR 200/month, 20 years): approx. EUR 92,408 (EUR 48,000 deposited). Starting early beats the higher rate — despite less investment.

Person A: EUR 100/month, 30 years€100,451.50

Person B: EUR 200/month, 20 years€92,408.18

Person C: EUR 300/month, 10 years€49,163.80

Notes

Common mistakes

Confusing linear and exponential growth
Simple interest grows linearly (same amount each year), compound interest grows exponentially (increasing amount each year). Over long durations the difference is enormous — after 30 years at 6%, compound interest yields 5.7x, simple interest only 2.8x.
Always use the compound interest formula K = K0 x (1+r)^t, not the linear formula K = K0 x (1 + r x t).
Overestimating the compound interest effect for short durations
The compound interest effect only unfolds its power over long durations. In the first 5 years, the difference to simple interest at typical rates is small. Only from 10-15 years does the exponential advantage become clearly visible.
For durations under 5 years, realistically assess the difference — the compound interest advantage is still marginal.
Not deducting costs and taxes
The compound interest calculator shows capital growth from the entered rate. Product costs, personal taxes and inflation are not calculated and must not be combined into a blanket return deduction.
Treat return assumptions as scenarios and consider costs, taxes and inflation separately using the actual product terms and personal situation.
Overestimating the effect of compounding frequency
Monthly vs. annual compounding seems dramatic, but at typical rates of 2-5% the difference is only 0.02-0.1 percentage points in effective rate. The compounding frequency is far less important than the nominal rate itself.
First compare nominal interest rates, then check compounding frequency as a secondary criterion.
Ignoring payment timing for savings rates
Whether the savings rate is paid at the beginning (in advance) or end (in arrears) of the period affects the result. In-advance payments earn one extra period of interest — over 30 years at 5% this means approx. 5% more final capital.
Check the payment timing (in advance/in arrears) and set it correctly in the calculator.

FAQ

Frequently asked questions

What is the compound interest effect?

The compound interest effect occurs when earned interest is not withdrawn but added to the capital. In the next period, not only the original capital but also the previous interest earns interest. This leads to exponential rather than linear growth.

How does compound interest differ from simple interest?

With simple interest, only the initial capital earns interest — the yield grows linearly. With compound interest, the credited interest earns interest in the following period, causing capital to grow exponentially. The longer the duration, the larger the difference.

What is the Rule of 72?

The Rule of 72 is a rule of thumb for estimating the doubling time: divide 72 by the interest rate in percent, and you get the approximate number of years until your capital doubles. At 6% interest, capital doubles in approx. 12 years (72 / 6 = 12).

How often should interest be compounded?

The more frequently interest is compounded (monthly instead of annually), the stronger the compound interest effect — because interest is added to the capital earlier and earns interest sooner. In practice, the difference at typical interest rates is small.

When is compound interest particularly beneficial?

The compound interest effect is stronger the longer the duration and the higher the interest rate. Already at 5% and 30 years duration, compound interest accounts for more than half of the final capital. Starting early is therefore the most important factor.

How do I calculate compound interest with a savings rate?

With regular deposits, each savings rate earns compound interest from the moment it is credited. Earlier rates benefit longer from the compound interest effect. The calculator automatically accounts for this when you enter a savings rate.

How does the compound interest calculator differ from the savings plan calculator?

The compound interest calculator focuses on visualizing and understanding exponential growth. It shows the comparison between simple interest and compound interest. The savings plan calculator is a 6-way solver that can calculate any variable (rate, duration, interest rate, etc.).

Are taxes considered in the compound interest calculator?

The compound interest calculator shows the pure capital development without taxes. In reality, capital gains tax (26.375%) reduces the annual interest earned and thus the compound interest effect. For a calculation with taxes, use the savings calculator with the tax option enabled.

Limits

Limitations

Assumption of a constant return: The calculator assumes a fixed interest rate over the entire duration. Real investments (especially equities and ETFs) fluctuate strongly each year.
No tax calculation: Capital gains tax, solidarity surcharge, and church tax are not considered. The actual net yield is lower than shown.
No product or custody costs: Fund fees (TER), transaction costs, and custody fees are not reflected and reduce the real yield.
Mathematical model calculation: The result serves to illustrate the compound interest effect and does not replace individual investment advice.

Sources

Sources and references

§ 248 BGB — ZinseszinsBundesministerium der Justiz
Legal regulation on the prohibition of compound interest in German law and its exceptions for banks and credit institutions.
View sourceRetrieved: 07/23/2026 · Verified on: 07/23/2026 · Primary source
Deutsche Bundesbank — Zinsrechnung und FinanzmathematikDeutsche Bundesbank
Publications by the Deutsche Bundesbank on financial mathematics fundamentals and interest calculation methods.
View sourceRetrieved: 07/23/2026 · Verified on: 07/23/2026 · Primary source
Verbraucherzentrale — Geldanlage und ZinseszinsVerbraucherzentrale Bundesverband
Clear explanation of the compound interest effect and its significance for long-term wealth building.
View sourceRetrieved: 07/23/2026 · Verified on: 07/23/2026

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Knowledge

Comparing interest: nominal rates, effective rates and compounding
Separate crediting intervals, costs and duration: a worked comparison explains which interest rate answers which question.
Regular saving or a lump sum: compare the money actually available
Compare a lump sum with monthly contributions fairly: equal total payments do not mean equal starting conditions.