Compound interest calculator

What is compound interest?

With compound interest, what your money earns starts earning in turn. In the first year, CHF 10,000 at 5% brings in CHF 500. In the second year, the 5% applies to CHF 10,500: you earn CHF 525. And so on.

Over 30 years, at a constant 5% return, that CHF 10,000 becomes about CHF 43,219. With simple interest, calculated only on the starting amount, you would only reach CHF 25,000. The difference is the snowball effect.

Time and the monthly contribution do most of the work

Take CHF 200 contributed every month, with a hypothetical return of 5% a year. After 10 years, you have put in CHF 24,000 and the simulation reaches about CHF 30,873. After 20 years, CHF 48,000 contributed becomes about CHF 81,161. After 30 years, CHF 72,000 contributed becomes about CHF 163,075.

Your contributions tripled between year 10 and year 30. The simulated value grew more than fivefold. In the final years, the interest generated far exceeds what you add. That is why starting early, even small, matters so much.

The monthly contribution makes the effort regular and automatic. You don't need a large starting capital: repetition builds the result.

Fees and inflation: the two quiet brakes

Fees of 1% a year look like nothing. On this page's default simulation (CHF 5,000 to start, CHF 200 a month, 5% for 20 years), they take the final capital from about CHF 94,427 down to about CHF 83,227. The gap of about CHF 11,200 is not just the fees paid: it also includes all the growth that money would have generated.

Inflation doesn't change the number on screen, it changes what that number can buy. With 2% inflation a year for 20 years, CHF 94,427 would have the purchasing power of about CHF 63,547 today. Open the advanced options to see both effects on your own numbers.

Constant-return simulation vs. real investing

This calculator applies the same return every month, from the first to the last. No real investment behaves like that. Markets rise, fall and sometimes stall for years, and the order of those years changes the outcome, especially when you contribute every month.

A past average return guarantees nothing about the future. Compare three scenarios to see the gap between a cautious and an optimistic assumption, and keep in mind that a loss is still possible.

Simulating a DeFi deposit like Aave

On Aave, you deposit, for example, USDC into a lending market. In return, you receive aTokens (aUSDC), whose balance grows continuously: the interest paid by borrowers is added to your deposit, with nothing to claim or reinvest. No payment arrives at a set time.

The rate shown is called the APY. Aave's interface derives it from the market rate, compounded second by second over a year, so it already includes compounding. DeFi / Aave mode applies it as is, with final capital = initial capital × (1 + APY)^t. At a constant APY, 5,000 USDC at 5% becomes 5,250 USDC after one year and 5,512.50 USDC after two years.

Two mistakes often skew this calculation. The first: compounding an APY that is already compounded, for example by dividing it by 365 and then compounding daily. The second: using exp(APY × duration) because interest accrues continuously. Over one year, that formula gives about 5,256 USDC instead of 5,250: compounding is counted twice.

Aave's real yield does not stay fixed. It depends on how much of the market is borrowed and changes with every deposit, borrow or repayment. The token rewards some markets add are not part of the base APY: they are claimed separately, in another token, and this calculator does not count them.

Finally, 5,250 USDC is not necessarily worth 5,250 dollars. A stablecoin can drift from its peg, and a DeFi protocol carries its own risks: a smart contract bug, a paused market, limited withdrawals when almost the whole market is borrowed. The simulation shows the effect of a constant APY, not what you will receive. Switch to DeFi / Aave mode.

Bitcoin does not pay interest on its own. This calculator simulates compound growth at a hypothetical return; it does not predict the price of Bitcoin. To see how many sats an amount is worth, use the Bitcoin converter.

Frequently asked questions

How do you calculate compound interest?

Without contributions, the formula is: final capital = starting capital × (1 + annual rate)^years. With CHF 5,000 at 5% for 20 years, that gives about CHF 13,266. As soon as you add a monthly contribution, the calculation runs month by month: the capital grows at the equivalent monthly rate, then the contribution is added. That is exactly what this calculator does.

Can I simulate monthly contributions?

Yes. Enter your monthly contribution, then choose in the advanced options whether it arrives at the start or the end of the month. At the start of the month, each contribution works one month longer, so the result is slightly higher. The amount stays the same for the whole duration and does not rise with inflation.

What is the difference between simple and compound interest?

Simple interest is always calculated on the starting amount. Compound interest is calculated on the starting amount plus the interest already earned. With CHF 10,000 at 5% for 30 years, simple interest leads to CHF 25,000, compound interest to about CHF 43,219.

Is the simulated return guaranteed?

No. The return you enter is an assumption, applied at a constant rate. A real investment varies from year to year and can lose value. The results on this page are simulations, not promises or advice.

Are fees, inflation and taxes included?

Fees and inflation, yes, if you enter them in the advanced options: fees reduce the simulated capital, and inflation is used to estimate its purchasing power in today's money. Taxes, no. They depend on your country and your situation, so they are not part of the calculation.

How do I simulate a deposit on Aave?

Switch to DeFi / Aave mode, then enter your deposit, the APY shown on Aave and the duration. The calculator applies final capital = initial capital × (1 + APY)^t, with t in years (days ÷ 365 for a duration in days). 5,000 USDC at a 5% APY becomes 5,250 USDC in one year if the APY stays constant. In reality, it varies.

Should I pick daily compounding for Aave?

No. The APY shown already includes compounding, and interest is added to the balance continuously, not at fixed intervals. Compounding that APY again every day, or using exp(APY × duration), would count compounding twice: about 5,256 USDC instead of 5,250 over one year.

An information tool. This calculator is not financial advice and promises no returns. Investing carries risks, including losing money. Read the disclaimer.