Compound Interest Calculator
Future value with compound growth.
Final amount (future value)
16,470,095원
Estimate only. Taxes, fees and inflation are not reflected.
What is compound interest
Compound interest earns interest on both the principal and previously accumulated interest. The difference from simple interest is small at first, but "interest on interest" compounds over time, growing assets exponentially — and adding regular monthly contributions amplifies the effect further.
How it's calculated
With annual rate r(%), compounding frequency m (1/year, 12/month, 365/day) and term t (years): period rate i = r/100/m, total periods N = m×t. Future value (FV) = principal×(1+i)^N + monthly contribution×(((1+i)^N − 1)/i). Total contributions = principal + contribution×N; total interest = final amount − total contributions.
Effect of compounding frequency
At the same annual rate, shorter compounding periods (annual → monthly → daily) mean interest compounds more often, slightly increasing the final amount. The difference is small compared to the rate and term themselves.
Reading compound growth as real return
A compound interest figure is nominal. To see what it is actually worth, set it against tax and inflation.
The compounding interval matters
At the same annual rate, more frequent compounding gives a larger result — monthly beats annual, daily beats monthly — though the gap widens only with higher rates and longer horizons.
Compare effective annual rates rather than headline rates, since they already reflect the compounding interval.
Most domestic deposits are simple or monthly compounded, so it is worth checking how much a 'daily compounding' claim is actually worth.
The rule of 72
Dividing 72 by the annual return approximates the years to double: about 12 at 6%, about 9 at 8%. It is not exact but is good enough for a sense of scale.
The same rule applies to prices: at 3% inflation, costs double in about 24 years — so a 3% nominal return doubles the money while leaving purchasing power unchanged.
Long-term planning therefore belongs in real terms, nominal return less inflation — and less tax, which often leaves less than expected.
Regular contributions work differently
A lump sum and regular contributions behave quite differently: each monthly payment has its own holding period, and later ones have less time to grow.
So the same total at the same rate ends higher as a lump sum. The merit of regular saving lies in spreading entry points and enforcing the habit, not in return.
Over a long plan, the earliest contributions do much of the work — front-loading helps.
Legal basis
- Withholding on interest — Income Tax Act art. 129
- Consumer price index — Statistics Korea
- Effective annual rate disclosure — financial product comparison standards