Compound interest calculator with monthly deposits

What does compound interest calculate?

Compound interest adds interest to the capital used to calculate the next period. Simple interest instead uses the principal without adding that interest to the calculation base. This tool simulates the first approach with a constant rate and monthly deposits; understanding the calculation does not guarantee an investment will achieve its result.

Without further deposits, €1,000.00 at an effective annual rate of 5% becomes €1,050.00 after one year and €1,102.50 after two. Simple interest of 5% on the principal would produce €1,100.00 after two years. These hypothetical examples keep the rate unchanged and exclude fees and other costs.

Source: Finanzas para Todos: simple and compound interest · Checked on 6 September 2026.

How is the effective annual rate applied?

An effective annual rate describes growth over a complete year under the calculation assumptions. The tool derives an equivalent monthly rate so that twelve periods reproduce the annual rate. It does not simply divide the percentage by twelve: an effective annual rate of 5% is approximately 0.4074% per month.

The relationship is monthly rate = (1 + annual rate) raised to 1/12, minus 1, with rates expressed as decimals. This field does not represent a commercial annual rate including costs. Enter an effective annual assumption; a nominal rate with a different interest period is not directly interchangeable with it.

When are monthly deposits added?

Each month, growth is calculated on the existing balance before the monthly deposit is added. The final deposit therefore earns no interest within that same month of the projection. Depositing at the beginning would produce a different result; this simulation uses the end of the month and a constant deposit amount.

Starting with €0.00 and adding €100.00 at the end of every month for one year at an effective annual rate of 12% produces €1,264.65. Contributions total €1,200.00 and calculated growth is €64.65. This example does not use a 1% monthly rate, which would describe a different effective annual rate.

How should you read the worked example?

With €1,000.00 initially, €100.00 deposited at each month end, an effective annual rate of 5% and ten years, final capital is €17,065.21. Contributions total €13,000.00 and calculated growth is €4,065.21. The yearly table separates those amounts so you can distinguish money you contribute from the growth produced by the scenario.

Published figures use two decimal places. Displayed growth is the displayed final capital minus contributions, so the amounts reconcile. Year zero contains only the initial amount; subsequent rows accumulate elapsed months under the same rate and deposit assumptions. These figures describe the model rather than statements from an actual account.

What does this simulation leave out?

The simulation excludes inflation, taxes, fees, losses, changing rates and withdrawals. The result describes future euros under a constant assumption, not their purchasing power or the net proceeds of a product. Changing the rate lets you compare scenarios without assigning a probability to any of those outcomes or claiming they will occur.

The calculator accepts annual rates from 0% to 20% and whole year periods from 0 to 50. Initial capital and monthly deposits can range from €0 to €1,000,000. These are supported input limits; they do not suggest what return to expect, how much to contribute or how long to hold an investment.

Which mistakes change the result?

Confusing annual and monthly rates, bringing deposits forward or reading final capital as profit changes how a result is understood. A constant assumption also differs from an observed return. Check the units and separate your contributions from calculated growth before comparing a scenario with a result from another calculator.

Two calculators may give different amounts if they apply deposits at different times, define the rate differently or deduct costs. Check those conditions before comparing final figures. The yearly table on this page uses the assumptions stated beside its inputs; it does not necessarily reproduce the calculation used by another simulator.

Questions about the simulation

These answers explain zero rates, zero year periods and values outside the model. Changing an input helps you explore the consequences of that assumption. A result does not choose a product for you or replace reading its conditions, risks, fees and the way it calculates or pays interest.

What happens with a 0% annual rate?

At 0%, no growth is added and final capital equals contributions. For example, €1,000.00 initially plus €100.00 each month over ten years totals €13,000.00. A zero rate does not remove monthly deposits from the scenario and does not predict the conditions you will find in an actual savings product.

What happens if the period is zero years?

With zero years, no months pass and the result contains only the initial capital. Monthly deposits are not added and calculated growth is €0.00. The table shows year zero so you can distinguish the starting amount from later years in which deposits would actually be included in the scenario.

Can you simulate a negative return?

This calculator does not accept negative rates or simulate losses: its annual rate range is 0% to 20%. An unsupported rate does not mean that outcome is impossible for a real investment. The range describes the available model and should remain part of how you interpret any resulting scenario.

Which concepts help explain the result?

You can read the compound interest definition, the explanation of inflation and the emergency fund entry. They distinguish how interest accumulates, how purchasing power changes and why money is set aside. These resources do not turn a mathematical example into a product recommendation or an expected rate of return.

• Compound interest
• Inflation
• Emergency fund