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Skip to content Compound interest is often referred to as the 8th wonder of the world. Yet the Compound interest formula not complicated at allbut our brain is the problem. Because people can think linearly, but not exponentially. Logically we understand exponential growth, but we cannot imagine it.
But no problem, because Schwiizerfranke has programmed the compound interest calculator for you. Here is the explanation!
The term in the interest calculator is given in years. A high starting capital or a high savings rate are super, but Of course, the compound interest calculator becomes interesting for long terms. This is because the compound interest effect is hardly noticeable at first, but soon grows exponentially.
With this calculator, the term is determined by your "current age" and "invest until age ...". So you can calculate comfortably and enter, for example, age 30 and age 65 (retirement), then the calculation is based on a term of 35 years.
Just for fun, increase the term to 100 years. Do you think your children would be happy about your long-term investment? By the way, there is an interesting Example of the Joseph penny. Here 1 penny is marked with 5%
Example 8: Duration 20 years
Example 9: Duration 100 years
At the Interest calculator is that Initial capital not absolutely necessary. Either you start with a starting capital or with a monthly savings instalment. Both are of course possible.
"Current Investments" represents your starting capital.
Here are a few examples of possible combinations:
Example 1: Initial capital CHF 1,000 / Annual savings rate CHF 0
Example 2: Initial capital CHF 0 / Annual savings rate CHF 100
Example 3: Initial capital CHF 1'000 / Annual savings rate CHF 100
"Intelligent people learn from the mistakes of others".
We have compiled our top selection for you from all our tests and experience reports:
You would like to make a monthly deposit and earn interest, as is the case with a ETF Savings Plan can be made? Your Annual savings rate you can enter here, but you can also leave the field empty. Should you monthly or quarterlyIf you want to pay something in, simply calculate the amount accordingly.
Example 4: Monthly savings rate CHF 100 -> enter CHF 1,200 as the annual savings rate.
Example 5: Savings rate CHF 600
Example 6: Quarterly savings rate CHF 600 -> CHF 2'400 annual savings rate
Example 7: Annual savings rate CHF 6'000
The higher the interest rate, the greater the impact of compound interest. You can find out the interest rate for your call money account at your bank. The interest rate is currently close to zero, so saving money doesn't make much sense at the moment.
Invest you about ETFsIf you look at the market, you can think about how the market will perform in the future and make an estimate. Often the historical return is also looked at.
Example 10: Historical return MSCI World ETF 9% per year
Example 11: Historical return SMI (Swiss Market Index) 8% per year
Optionally you can use the Inflation at Investment calculator take into account. This is then deducted directly from the return and the assets grow correspondingly more slowly.
It is best not to choose the current inflation, but a historical Mean value. For Switzerland, that would be about a good 2%.
And this is how the result of the interest calculator looks. The final capital is the return generated by compound interest including your payments. So your Initial capital + savings amounts + interest + compound interest.
Below this, you will see a breakdown of how much of the final capital you have paid in and how much the compound interest effect has generated for you.
You want the Build your own compound interest calculator in Excel or Apple Numbers and optimise it if necessary? No problem, the compound interest calculator formula is quite simple. However, confusion sometimes arises with the result of the interest formula.
This is because it depends on when the paid-in capital earns interest. In the interest calculator above, the so-called "interest rate" is used. Savings Banks Formula with interest in arrears is used. When you calculate compound interest with this formula, the savings rate is added at the end of the year and then interest is paid annually.
Thus, a deposit at the beginning of the year or an interest payment at another time will affect the final capital. Therefore, you should consider a Excel compound interest savings plan Invoice with monthly deposit distinguish whether in advance or in arrears is paid in.
Compound interest Formula Excel without Savings calculator: Ke=Ka(1+p/100)^n
With Ke= capital end / Ka= capital start / p= percentage interest in percent % / n= term in years
Compound interest Formula Excel with Savings calculator: =ZW(interest rate per period; number of periods; savings amount)
With ZW= time value formula Excel / interest rate per period in percent / savings amount corresponds to periodic deposit)
"Intelligent people learn from the mistakes of others".
We have compiled our top selection for you from all our tests and experience reports:
You can easily build an Excel savings plan calculator yourself thanks to the compound interest formula. Just bear in mind the Difference between advance and deferred payment.
To create a calculator compound interest savings plan, you can also automatically load data from Google Finance into Excel and thus include e.g. current stock prices. More Savings Calculator Excel Templates and Calculator you can find here with the other computers from Schwiizerfranke.
3 responses
Hello Eric
Either something is wrong with my tablet or your compound interest calculator is really wrong. I always see double the amount of the current investments in the result (paid in). I have set annual investments to 0 francs. Otherwise your contributions are great. Thank you very much!
Kind regards, Simon
Hello Simon,
Thank you for your feedback. Everything works correctly for me. Maybe you can clear the browser cache and reload the page.
If the error persists, please send me an e-mail!
Best regards and many thanks for your support,
Eric
It's hard to find educated people about this topic, however, you sound
like you know what you're talking about! Thanks