Compound Interest Calculator

Compound interest is the mechanism that makes consistent monthly investing actually produce long-term wealth. The calculator above lets you model exactly how your portfolio grows over time — with realistic European-specific defaults and a tax adjustment that gives you the after-tax view too.

How to use this

The calculator answers: what will my investment portfolio be worth in N years if I contribute €X/month at Y% return? With defaults that reflect European-investor realities rather than copy-pasted US assumptions.

Key inputs:

Initial principal: what you have invested today. €0 is fine if you're starting from scratch.

Monthly contribution: what you add each month. €500 is roughly the median European retail-investor contribution; €1,500-€2,000 is what serious accumulators do; €3,000+ is high-income aggressive saving.

Annual return rate: 7% nominal is the long-run stock-market average. 5% is more conservative and matches the post-2022 view. Use 5% real (after inflation) for retirement planning where you care about purchasing power; use 7% nominal for simple wealth-projection scenarios.

Compounding frequency: monthly is standard for investment accounts. Annual produces slightly lower numbers; the difference is real but modest at typical investment horizons.

Effective tax rate: 28% for most EU countries on investment gains during withdrawal. 0% for fully tax-sheltered portfolios (UK ISA, French PEA after 5 years, etc.).

What the result tells you

Final balance: the total portfolio value at year N, including your contributions and accumulated interest.

Total contributions vs total interest: the split between what you put in and what compounding produced. For long horizons, the interest portion typically exceeds contributions — often by 2-5×, depending on the time period.

After-tax final balance: applying the tax rate to the interest portion only (your contributions are after-tax money you've already paid tax on). This is the realistic spendable number.

Money doubles in: how long until your initial principal doubles. The Rule of 72 says 72/rate ≈ years to double; the calculator gives you the exact answer for your scenario.

The compound interest math

The basic formula is simple:

Final balance = Initial × (1 + r)^n + Monthly × (((1 + r)^n - 1) / r)

Where r is the periodic rate, n is the number of periods. The calculator runs this formulation forward for the time horizon you set.

The interesting math: at typical European investment horizons (15-25 years) with disciplined monthly contributions, the interest portion of your final balance dwarfs your contributions by 2-5×. €500/month for 25 years at 7% = €60K of contributions and €182K of interest, total €242K. The compounding mechanism is what makes consistent monthly investing actually work.

Common scenarios

The "monthly investor's projection" (€10K starting, €500/month, 20 years, 7%):

• Final balance: ~€297K
• Total contributions: €130K
• Total interest: ~€167K
• Money doubles in roughly 10-11 years

The "serious accumulator" (€50K starting, €2,000/month, 25 years, 6% real):

• Final balance: ~€1.6M (in today's purchasing power)
• Total contributions: €650K
• Total interest: ~€950K
• Built over disciplined sustained investing

The "Coast FIRE forward projection" (€200K starting, €0/month, 30 years, 5% real):

• Final balance: ~€865K
• Total contributions: €200K (initial only)
• Total interest: ~€665K
• Compounding alone produces 4× the principal over 30 years

Country-specific tax considerations

The default 28% effective tax rate is appropriate for most EU countries. For specific situations:

• UK ISA-wrapped portfolios: set tax rate to 0%
• French PEA-wrapped (after 5 years): set to 17.2% (social charges only)
• German Freistellungsauftrag covering small amounts: depends on portfolio size
• Swiss 3a wrappers: depends on country rules

The tax adjustment matters especially for long horizons — over 20+ years of compounding, the tax drag on non-sheltered accounts can compound to material amounts. UK readers should especially focus on maximizing ISA contributions before any non-ISA investing.

What this calculator doesn't model

A few things to be aware of:

No inflation adjustment: the calculator shows nominal balances. For retirement-target planning where you care about purchasing power, run with a real-return rate (5% real instead of 7% nominal).

No sequence-of-returns risk: the calculator assumes constant returns. Real markets have volatility; sequence matters for portfolios in withdrawal phase. For retirement planning, supplement with sequence of returns risk analysis.

No tax on interim contributions: the model assumes you've already paid tax on the principal and contributions; only the interest portion is taxed at the end. This matches how investing actually works for most European investors.

No fees: modern broad-market UCITS ETFs have 0.05-0.30% expense ratios, which is small but compounds slightly over decades. Subtract 0.2-0.3% from your assumed rate for a more conservative projection.

Next steps

Once you've run the calculator and see your projection:

1. Set up monthly automation if you haven't already. Trade Republic makes this free and frictionless.
2. Maximize tax shelters for the country you're in: UK ISA, French PEA, German Freistellungsauftrag, Swiss 3a.
3. Audit annually — verify actual performance matches projection, adjust contribution rate if needed.
4. Don't fiddle: the projection assumes consistent contributions over decades. Lapsed savings discipline is what kills most long-term plans, not bad investment choices.

For the broader investing framework, see the FIRE movement guide, how to retire early in Europe, or the more focused FIRE calculator that incorporates withdrawal-rate math.