Lump sum, monthly compounding
Input: 10,000,000 KRW, 5% annual, 10 years, no contributions
Result: Final balance ≈ 16,470,095 KRW
Compound Interest Calculator
Enter principal, annual rate, term, compounding frequency, and a monthly contribution to see how compound interest grows your balance, with a year-by-year breakdown.
Investment Information
Amount to add every month. Enter 0 if you only invest a lump sum.
Formula and decision logic
Compound interest grows the balance not only on the principal but also on previously earned interest, with the compounding frequency and any regular monthly contributions controlling how fast it accelerates.
A = P × (1 + r/n)^(n·t) + PMT × ((1 + r_m)^(12t) − 1) / r_m
r_m = (1 + r/n)^(n/12) − 1 (monthly equivalent of the compound rate)
Worked examples
With monthly contributions
Input: 10,000,000 KRW + 200,000/month, 5% annual, 20 years
Result: Contributions roughly 58M, interest portion grows over time
How to use this calculator
- 1Enter the initial principal
- 2Enter the annual rate and term in years
- 3Pick a compounding frequency and a monthly contribution
- 4Review the final balance and the yearly breakdown
How to read the result
- Compounding frequency matters most at higher rates and longer horizons, while contributions dominate at low rates or short periods.
- Compare total interest vs. total contributions to judge how much the rate alone is doing.
Common input mistakes
- Using a monthly rate where an annual rate is required, or vice versa.
- Comparing two scenarios with different durations as if they were the same.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is earned only on the principal. Compound interest is earned on the principal plus any previously credited interest, so it grows faster over time.
How much does the compounding frequency change the result?
At the same annual rate, more frequent compounding (daily > monthly > quarterly > annual) yields a slightly higher effective return. The gap widens with higher rates and longer horizons.
How is the monthly contribution applied?
Each month interest is credited first, then the contribution is added. The yearly table shows the contributions and interest for each year separately.
Does this match real-world returns?
It assumes a constant annual rate. Real investments are affected by market volatility, fees, and taxes, so this is a theoretical projection.