Compound interest calculator

You might be wondering how to calculate compound interest?

Let's get straight to the point by analyzing the formula for annually compounded interest:

Vf = Vi × (1 + ρ/n)^(n×t)

The compound interest formula, expressed by Vf = Vi × (1 + ρ/n)^(n × t), describes how an investment or loan grows over time.

In this formula:

• Vf is the future value of the investment.
• Vi represents the initial value or principal amount.
• ρ (rho) is the annual interest rate (expressed in decimal form, so a rate of 5% would be 0.05).
• n is the number of times interest is compounded per year.
• t is the number of years the money is invested or borrowed.

The calculation of compound interest differs from simple interest in that it calculates interest not only on the initial principal but also on the interest accumulated in previous periods, resulting in exponential growth of the invested capital over time.

The compound interest calculator is an easy-to-use tool for visualizing the potential growth of your investments over the long term. To start, enter your initial capital and indicate the amount you plan to save each month.

You will then need to choose your investment horizon, in years, and the annual interest rate you expect from your investments.

The calculator simulates compound interest based on regular contributions and interest rate, showing how your capital can grow over time. The tool takes into account the interest payments, which can be set to a monthly frequency, to give you an accurate estimate of the final capital you could accumulate.

It's an ideal tool for planning your long-term investments, whether in stock assets or other types of assets like real estate, cryptocurrencies, or savings accounts. For those looking for guidance on the amount to invest, our budget calculator can help you establish a realistic savings plan.

After filling in the different fields, you will see on the right the value of the final compounded capital consisting of your initial capital, contributions & interest earned at the end of the chosen period, as well as the frequency of the contributions.

The chart below illustrates the evolution of your investment over time, highlighting the significant impact of compound interest on your capital. You will clearly see how your initial investments, combined with regular contributions and the accumulation of interest, contribute to increasing your overall wealth.