By Gabriele Denaro · Published 20 September 2026 · Updated 6 October 2026
Compound interest is what happens when the return you earn starts earning returns of its own. €1,000 growing at 7% a year is not €70 a year forever. In year two it grows on €1,070, not €1,000, and that gap widens every year that follows.
With simple interest, 7% of €1,000 is €70 every year, which gives €1,700 after ten years and €3,100 after thirty. With compounding the same €1,000 reaches about €1,967 after ten years, €3,870 after twenty and €7,612 after thirty. The first decade looks like a small difference. The last decade adds more than the first two combined.
Now add monthly savings. Put €200 a month at 5% a year: after 20 years you have contributed €48,000 and have about €81,200. After 30 years you have contributed €72,000 and have about €163,100. The extra ten years added €24,000 of your money and nearly €82,000 to the balance. Time did most of the work in the second half.
These are clean examples with a constant return, which real markets do not give. Real returns vary from year to year, costs and taxes reduce them, and inflation reduces what the final sum can buy. A bad year early or late in the period can change the outcome noticeably. Read the figures as an illustration of the mechanism, not as a forecast of what you will get.
The calculator below takes a starting amount, a monthly contribution, an annual rate and a number of years, and shows what you contributed and how much is interest. Try the same plan with ten fewer years, or with a rate one point lower, and notice which change hurts more.
General educational information, not personal financial, tax or legal advice. It may be incomplete or out of date. Terms of use.