Compound Interest Calculator — With Monthly Contributions

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