๐ Compound Interest Calculator
Enter your principal, monthly contribution, annual rate, and time horizon to simulate future value and total interest earned. Useful for visualizing how NISA or other regular investment plans can grow.
How to use
- Enter the principal (starting lump sum, if any).
- Enter the monthly contribution amount.
- Enter the expected annual rate and the number of years.
- Total contributions, total interest earned, and future value are calculated automatically.
How the calculation works
Compound interest adds the interest earned to the principal, so the next period's interest is earned on the larger total. Interest earns interest, and growth accelerates the longer it runs. This tool compounds monthly. With monthly rate r (annual rate รท 12) and n months, an initial principal P grows to P ร (1 + r)โฟ. Regular monthly contributions M grow to M ร ((1 + r)โฟ โ 1) รท r โ the sum of each contribution compounding over the months it has left. The future value is the two added together. Total contributions are principal + monthly amount ร months, and total interest is future value โ total contributions.
Worked example
No starting principal, ยฅ30,000 a month, 5% a year, 20 years (240 months) Total contributions: 30,000 ร 240 = ยฅ7,200,000 Future value: about ยฅ12,331,010 Total interest: about ยฅ5,131,010 Interest amounts to about 70% of what was paid in. Over 10 years instead, the interest is far smaller โ compounding shows its effect most over long periods.
Things to be aware of
- This assumes the rate you enter holds steady every month. It does not guarantee any actual return.
- Real investments such as funds rise and fall in price, so returns are never the same every year.
- Taxes and fees (such as fund expense ratios) are not included, nor are tax-advantaged schemes such as NISA or iDeCo.
- Amounts are rounded to the nearest yen.
FAQ
How often is compounding calculated?
Monthly contributions and interest are compounded monthly, accumulating to a projected future value over the full period.
Does this guarantee investment returns?
No. This is only a projection assuming the entered rate holds steady โ it does not guarantee actual investment performance.
Can I simulate contributions only, with no starting principal?
Yes โ leave the principal at 0 and enter only a monthly contribution to simulate a pure dollar-cost-averaging plan.
Does this account for NISA or iDeCo tax advantages?
No. This tool only performs a compound interest projection and doesn't model NISA or iDeCo tax-free allowances. For a plan more specifically modeled on NISA, see the NISA / DCA Investment Simulator.
How many years does it take to really feel the effect of compounding?
Compounding tends to accelerate the longer the period runs. Try comparing the future value at 10 years versus 20 years to get a feel for how much time itself matters.