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Compound Interest Calculator — With Monthly Contributions

Compound interest growth: initial principal + monthly contributions. Year-by-year breakdown with total interest earned. For savings, ETFs, retirement, FIRE planning. Free.

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Initial amount

Interest rate (% / year)

Years

Compound frequency

Monthly contribution

Leave empty if no contribution

Final value

—

Total contributions—

Total interest earned—

Multiplier—

Year-by-year breakdown

Year	Start	Added	Interest	End

Compound interest — Einstein called it "the eighth wonder of the world". Money + interest auto-reinvest. Try 10%/year for 30 years to see the magic.

What is compound interest?

Compound interest = interest earned also earns interest. Unlike simple interest, which only counts the original principal.

Compounding is sometimes called the eighth wonder of the world: those who understand it earn it; those who don't, pay it.

When this tool helps

Retirement planning: deposit $200/month at 8%/year — how much in 30 years?
House down-payment: need 2 billion VND in 10 years at 6% — how much per month?
Compare investment vehicles: 6% savings vs 8% bond fund vs 12% equity fund — see the gap after 10 years.
Teaching kids finance: save $50/month from age 22 to 60 at 8% — about $130k.

Compound interest with regular contributions

FV = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)]

P    = initial principal
PMT  = contribution per period
r    = annual rate
n    = compounds per year (12 = monthly, 4 = quarterly, 1 = yearly)
t    = years
FV   = future value

Compounding frequency

Yearly (1): 12-month bank deposits, government bonds.
Quarterly (4): certificates of deposit (CDs).
Monthly (12): mutual funds, ETFs, online savings.
Daily (365): stablecoin staking, some neobanks.

More frequent compounding helps more at higher rates; barely matters at low rates.

Rule of 72 — quick mental math

Years to double money ≈ 72 / (rate %).

6% → doubles in 12 years
8% → doubles in 9 years
12% → doubles in 6 years
4% inflation → halves purchasing power in 18 years

Practical caveats

Real return = nominal return − inflation: Vietnam inflation ≈ 4%/year, so a 6% deposit nets 2% real.
Taxes: in VN, personal savings interest is tax-free, but dividends and capital gains are 0.1-5%.
Risk: 12-15% returns sound great but come with high risk (equities, crypto). 6% is safe (banks, government bonds).
This tool is NOT investment advice. Talk to a licensed advisor before deciding.

FAQ

How does compound interest differ from simple interest?

Simple interest only earns on the original principal — $100k at 8%/year is $8k each year. Compound interest adds earned interest back to principal — year 2 earns interest on $108k, year 3 on $116.64k. Over 30 years, $100k grows to ~$1M with compounding versus only ~$340k with simple interest.

What is the Rule of 72?

Years to double your money ≈ 72 / (rate %). At 6% it doubles in 12 years; at 8%, 9 years; at 12%, 6 years. It works in reverse for inflation: 4%/year inflation halves your purchasing power in 18 years.

Are bank deposits actually compounded?

Depends on the product. A 12-month CD that auto-renews → compounded. A deposit that pays interest at maturity which you spend → effectively simple interest. Online savings accounts usually compound monthly. The tool always assumes compounding.

Does compounding frequency (daily/monthly/quarterly) matter much?

At low rates (4-6%), barely — depositing $50k for 10 years differs by only a few hundred dollars between monthly and yearly compounding. At high rates (15%+, like crypto staking), it matters significantly. Most mutual funds and ETFs compound monthly.

Can I plan FIRE (financial independence) with this tool?

Yes. Enter current capital + monthly contribution + expected return (8-10% historically for US equities) + years. The year-by-year table shows when you hit your target. Caveat: 10% is the long-run S&P 500 expectation, not a guarantee. Real return = nominal − inflation.