What is compound interest?

Interest you earn is added back to the principal and itself earns interest next period. At 5% your capital doubles in ~14 years (rule of 72: 72/5 ≈ 14.4). The effect is exponential: 10,000 at 5% for 40 years becomes ~70,000; 10,000 at 10% for 40 years becomes ~450,000. The starting amount is not the most important; time and rate are.

What rate is realistic?

Bank deposits: 2–5% (varies with central bank rate). Norwegian bonds: 3–5%. Global equity fund: historically 7–10% annually (S&P 500 has delivered ~10% nominal since 1970). Balanced fund (50/50 stocks/bonds): ~5–6%. Note these are nominal - inflation eats 2–3% per year, so real return is lower. Past performance does not guarantee future results.

Why is the contribution at end of month?

Standard convention in finance ("ordinary annuity"), because salary typically arrives and then goes to savings. Contributing at the start ("annuity due") gives a slightly higher final amount (one extra month’s interest per contribution). The difference is ~0.4% per year at 5%, negligible for long-term saving.

No. The numbers are nominal gross return. In Norway, fund gains are taxed at 37.84% (2024), interest at 22%. ASK (share savings account) and BSU offer tax advantages. Inflation (2–3%/year) reduces the real value. For accurate planning, subtract tax and inflation manually or use a lower "real rate" (nominal minus inflation).

Savings Calculator with Compound Interest

Final amount
Total contributed
Interest earned

How it works

See how your savings grow with compound interest. Enter the initial amount, how much you save each month, the expected annual rate and the number of years. The tool compounds monthly (contribution at the end of each month) and shows the final amount, how much you contributed and how much is interest. Everything is calculated locally in your browser.

The rate is assumed constant over the whole period, and the figures are before tax and inflation. This is an estimate, errors excepted.

About this tool

The savings calculator shows how your money grows with compound interest over time. Enter a starting amount, how much you save each month, an expected annual rate and the number of years. The tool compounds monthly and separates how much you contributed yourself from pure return. Useful for fund savings, retirement targets, first-home savings, house plans, saving for children, and for illustrating the power of starting early. All local, no server.

How to use it

Enter the starting amount.
Add how much you save each month.
Set the expected annual rate (in percent).
Choose the number of years and read off the final amount with return.

Examples

Monthly index fund savings

InputStart 0, 3000/month, 7% for 25 years

OutputFinal amount ~2.44 million, deposited 900 000, return ~1.54 million

First-home savings target

InputStart 0, 2200/month, 4% for 10 years

OutputFinal amount ~325 000, deposited 264 000, interest ~61 000

BSU (Norwegian first-home savings for youth) offers rates well above regular savings plus up to 20% tax deduction on annual deposits (max 27,500 NOK/year, 300,000 NOK total). BSU is often the most profitable starting point before age 34.

Common use cases

Retirement planning: see what 40 years of steady saving becomes.
Compare the effect of starting 5 years earlier or later.
Simulate fund savings at 3%, 5%, 7% or 10% annual rate.
Set a concrete monthly amount against a goal (house, car, dream trip).
Show children and youth the power of interest and time.

Frequently asked questions

What is compound interest?: Interest you earn is added back to the principal and itself earns interest next period. At 5% your capital doubles in ~14 years (rule of 72: 72/5 ≈ 14.4). The effect is exponential: 10,000 at 5% for 40 years becomes ~70,000; 10,000 at 10% for 40 years becomes ~450,000. The starting amount is not the most important; time and rate are.
What rate is realistic?: Bank deposits: 2–5% (varies with central bank rate). Norwegian bonds: 3–5%. Global equity fund: historically 7–10% annually (S&P 500 has delivered ~10% nominal since 1970). Balanced fund (50/50 stocks/bonds): ~5–6%. Note these are nominal - inflation eats 2–3% per year, so real return is lower. Past performance does not guarantee future results.
Why is the contribution at end of month?: Standard convention in finance ("ordinary annuity"), because salary typically arrives and then goes to savings. Contributing at the start ("annuity due") gives a slightly higher final amount (one extra month’s interest per contribution). The difference is ~0.4% per year at 5%, negligible for long-term saving.
Is tax included?: No. The numbers are nominal gross return. In Norway, fund gains are taxed at 37.84% (2024), interest at 22%. ASK (share savings account) and BSU offer tax advantages. Inflation (2–3%/year) reduces the real value. For accurate planning, subtract tax and inflation manually or use a lower "real rate" (nominal minus inflation).

Technical background

Future value is FV = P·(1+i)ⁿ + PMT · [((1+i)ⁿ − 1) / i], where P is start, PMT is monthly contribution, i = annual rate / 12 (monthly rate), n = number of months. This assumes ordinary annuity (contribution at end of each month). All arithmetic runs in IEEE 754 double-precision in the browser; 15th-decimal rounding is negligible. Note the rate is assumed constant, which is a clear simplification: real returns swing year to year (especially stocks). For Monte Carlo simulation with rate uncertainty you need more advanced tools. Figures are nominal (pre-tax, pre-inflation); check local rules for realistic net.