Compound interest calculator
Compound interest means the interest itself earns interest, not just the original sum. That is what makes the difference grow so sharply over time: doubling the horizon does not double the result, it does considerably more.
- Total contributed
- €53,000
- Growth earned
- €71,379
Rates and thresholds
- Formula
- final = initial × (1 + r)ⁿ
- Compounding
- Monthly
- The rule of 72
- 72 / rate % ≈ years to double
- €5,000 at 7% for 10 years
- €10,048
- The same, over 20 years
- €20,194
How long does it take for money to double?
The rule of 72 gives a close answer: divide 72 by the annual rate and you get the number of years. At seven per cent that is about ten years, at three per cent about twenty-four. It is an approximation, but at ordinary rates it is only months out — €5,000 at seven per cent reaches €10,048 in ten years.
Should the rate be before or after inflation?
Either works, as long as you read the answer accordingly. A nominal rate gives the sum in future euros — what the account will say. Subtract inflation and enter the difference, and you get the sum in today's euros, which is what it will actually buy. Over a long horizon the second is the honest number: thirty years of inflation makes the first look far better than it is.
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