Compound interest calculator: project an investment over time

Open Monetra’s compound interest calculator before continuing. Results update instantly whenever an amount, duration or rate changes. Start with a central scenario and adjust one assumption at a time so that its effect remains visible.

The calculator answers a practical question: if an initial amount and a regular monthly contribution remain invested for a chosen period, what value could they reach under a stated return? It produces a projection, not a market forecast.

Initial capital

Initial capital is invested at the beginning and participates throughout the entire projection. It can be zero when the plan starts only with recurring contributions. With all other assumptions unchanged, more initial capital mechanically raises the final value.

Monthly contribution

The monthly contribution is added at the end of every month. It may represent an automated transfer into a brokerage account, French PEA or another investment wrapper. Regular deposits increase total invested capital, but the model does not reproduce the different market price encountered by every real purchase.

Investment duration

Duration, from 1 to 50 years, determines the number of monthly compounding periods. More time does not guarantee a gain, but it magnifies positive or negative return assumptions. Select a horizon connected to the actual goal rather than the duration that produces the largest headline number.

Estimated annual return

The annual return is an average assumption before the annual fees entered below. A 7% input does not mean a portfolio will rise by 7% every calendar year. Market investments may alternate gains, losses and flat periods. Compare a cautious, central and favourable scenario instead of relying on one path.

Contribution growth, fees and inflation

Annual contribution growth increases the monthly deposit at the start of each new year. A €500 monthly contribution with 2% growth becomes €510 during year two. This can model saving capacity that gradually follows income.

Annual fees are subtracted from the return assumption: a 7% return and 0.5% fees produce a 6.5% net assumption. This transparent simplification does not separately model dealing charges, fixed commissions, tax or tracking difference.

Inflation is used only to express the final value in today’s purchasing power. It does not change the nominal portfolio result, so both figures remain visible separately.

The estimated final portfolio is the nominal value at the end of the scenario. Total contributed combines initial capital and every monthly deposit, including annual increases. Investment gains equal final value minus total contributions.

The share from gains states which portion of the final portfolio did not come directly from deposits. A high percentage may reflect a long duration or ambitious return; it does not make the outcome more certain. Under a negative return, gains become losses and this percentage may be negative.

When inflation is above zero, estimated real value translates the final portfolio into today’s euros. It answers a different question from nominal value: not how many euros might be displayed, but what those euros could represent in current purchasing power.

The chart compares portfolio value with cumulative contributions. The distance between the lines is calculated growth. The yearly table provides the same figures for every year, including long 50-year projections.

For one initial amount, the standard relationship is:

Final capital = capital × (1 + rate)^duration

Reinvestment is the key. After a positive first period, the next return applies to original capital and earlier gains. The base on which growth is calculated can therefore accelerate.

Recurring contributions require repeated calculations. Monetra converts the net annual return into an equivalent monthly rate:

monthly rate = (1 + net annual return)^(1/12) − 1

Each month, this rate is applied to the existing balance before the contribution is added. This end-of-month convention is slightly more conservative than adding money at the beginning, when it would receive one extra month of return.

Use the opening scenario:

• initial capital: €10,000;
• monthly contribution: €500;
• annual return: 7%;
• duration: 20 years;
• no fees, contribution growth or inflation.

The engine performs 240 monthly compounding steps and 240 end-of-month deposits. Total contributions reach €130,000: €10,000 initially and €120,000 from recurring deposits. The estimated final portfolio is €292,465.03 and calculated gains are €162,465.03, about 55.5% of the final value.

These numbers are not an expected performance. The model uses a smooth equivalent rate, while a real portfolio follows an uneven path. A major fall near the beginning or end can create a different experience even when a long-run average later appears similar.

During early years, most growth usually comes from deposits. Later, under a positive return assumption, past gains create an increasingly large base. Calculated gains in the final years can therefore exceed those in the opening years without any change in the rate.

Starting early adds compounding periods, but it is not a reason to invest money needed soon. The horizon must remain consistent with the investment’s risk and the likely date when the money will be used.

There is no universal rate. A cautious assumption can test whether the goal remains viable, a central one can support planning and a higher one can illustrate upside — never present the optimistic case as certain.

The return should ideally be net of costs not entered elsewhere and tested across several values. France’s financial-markets authority explains that an ETF follows its index both up and down and can involve market, tracking, currency and liquidity risks. Review the AMF guide to ETFs and the chosen fund’s key information document. Past performance never guarantees future performance.

One percentage point of fees does not only remove one point in year one. It also reduces capital available to generate returns during every following year. Compare, for example, 7% with no fees against a 6% net return to see the compounded cost.

Inflation works differently. It does not remove cash from the account but reduces future purchasing power. Monetra calculates:

real value = final portfolio ÷ (1 + inflation)^duration

This keeps nominal return, return net of fees and purchasing power conceptually separate. It remains a constant-inflation estimate.

To compare this investment mechanism with a home-buying path, use the buy, rent and ETF comparator and its detailed guide. That model adds property, mortgage, rent and opportunity cost, but it also depends on assumptions that deserve sensitivity testing.