Compound Growth Calculator

By Kestutis Balciunas · Last reviewed: 2 June 2026 · See our editorial process

Educational use only. I am a European self-directed investor (11+ years), not an FCA-regulated adviser. See our affiliate disclosure.

Why compound growth matters for European long-term investors

If you only learn one concept in your investing life, make it compound growth. Compound growth is the mechanism by which the returns your portfolio earns this year start earning their own returns next year, and the year after, and the year after that. Over a 25 or 30 year horizon, the compounding effect typically contributes more to your final wealth than your own contributions do. That is not marketing language — it is a mathematical property of geometric series, documented for decades in the Bogleheads wiki on compound interest and in the US SEC official compound interest calculator.

For European investors saving into UCITS ETFs through a regulated broker, the variables are simple: how much you start with, how much you add each month, what annual return you assume, and how many years you let it run. The compound growth calculator below lets you change each variable and watch the projection update in real time. I built this page so you can stress-test your own plan without opening a spreadsheet — whether you are a 25-year-old just starting a Trade Republic savings plan, a 40-year-old rebuilding after a career break, or a 55-year-old wondering how much your existing pot can still grow before retirement.

New to the app? I wrote my walkthrough of the Trade Republic savings plan.

I cover every screen of the setup in setting up your first savings plan at Scalable.

I compare both brokers profile by profile in the two brokers compared head-to-head.

Below the calculator you will find the formula in plain language, the Rule of 72 shortcut, six worked European scenarios in EUR, the assumptions and limitations you must understand before trusting any projection, and the practical broker steps to actually execute the plan. Run a few scenarios first, then read the rest.

How to use this calculator

The calculator takes four inputs and produces one number plus a chart. Here is how I recommend using it:

1. Starting amount. Enter the lump sum you already have invested today (or zero if you are starting from scratch). For most readers this is the current value of an existing ETF account.
2. Monthly contribution. Enter the realistic amount you can add every month without missing it. Be honest — an aspirational EUR 1,500 you cannot actually sustain produces a fantasy chart.
3. Annual rate. Use a conservative real-world figure. For a globally diversified equity ETF portfolio I personally model 6% to 7% nominal in EUR. If you want to be cautious, use 5%. Anything above 9% is wishful thinking over a multi-decade horizon.
4. Years. Enter your true time-to-goal — not “retirement age” but the number of years until you will actually start drawing the money.

Read the final value, then immediately rerun the calculation with the rate 2 percentage points lower. That gives you a downside scenario. Save both numbers. The truth almost always lands between them, and planning around that range is more useful than fixating on a single optimistic point estimate.

The math behind compound growth

The calculator runs the standard future-value formula used in every finance textbook:

FV = P(1+r)ⁿ + PMT × [((1+r)ⁿ − 1) / r]

In plain English:

• FV = future value (what you end up with)
• P = your starting principal
• r = periodic interest rate (annual rate ÷ 12 for monthly compounding)
• n = number of periods (years × 12 for monthly)
• PMT = recurring contribution per period

The first half compounds your starting lump sum. The second half compounds every monthly contribution from the moment you make it until the end of the horizon. Because money invested in year 1 compounds for the full horizon while money invested in year 25 only compounds for five years, the earliest contributions do the heaviest lifting. This is the mathematical reason every personal finance writer screams “start early” — the formula literally rewards time more than amount.

The Rule of 72 — the back-of-envelope shortcut

The Rule of 72 is a mental-arithmetic trick that lives alongside the full future-value formula: divide 72 by your annual return percentage to estimate how many years it takes your money to double. At 6%, money doubles every 12 years (72 / 6). At 8%, every 9 years. At 4%, every 18 years. At 7% — my personal base-case assumption — capital doubles every 10.3 years.

Why this matters in practice: a 30-year-old contributing EUR 10,000 today at 7% will see that money double roughly 3 times before age 60 (at year 10, year 20, year 30). That EUR 10,000 becomes EUR 20,000, then EUR 40,000, then EUR 80,000 — without any further contribution. The same EUR 10,000 invested at age 45 only doubles once before 60. The Rule of 72 makes the cost of waiting brutally visible.

Cross-check the rule against the calculator and you will see it lands within a percent or two for any rate between 4% and 12%, which is the entire realistic range for diversified equity ETFs. For quick mental modelling at a coffee shop or during a salary negotiation, the Rule of 72 is the single most useful piece of financial mathematics ever simplified into one number.

Worked examples — real European investor scenarios

Below are six scenarios I built using the same formula the calculator runs. All figures in EUR, all assume monthly contributions, end-of-month timing, no fees and no taxes (we cover those limitations in the next section).

A few takeaways worth internalising. In the second scenario, the investor contributed EUR 180,000 of their own money over 30 years and ended with EUR 612,000 — meaning roughly EUR 432,000, or 70% of the final pot, came from compound growth itself. In the fifth scenario the contributed amount was EUR 385,000 and the final pot EUR 879,000 — still more than half from compounding. The pattern is consistent: the longer you let the formula run, the larger the compounding share of your final wealth.

Now compare the second scenario (EUR 612,000) with the third (EUR 413,500). The third investor started with EUR 50,000 and contributed EUR 1,000 per month — on paper they put in more capital. But they only had 15 years. Time beats capital, repeatedly.

What the calculator assumes

Every projection tool makes simplifying assumptions. Understanding them is the difference between using the calculator as a planning aid and using it as false certainty. This calculator assumes:

• A constant annual return rate. Real markets do not deliver 7% every year — they deliver −30% one year and +25% the next. The calculator smooths this into a straight line.
• Monthly contributions made at end of month. Slightly more conservative than start-of-month timing.
• All returns are reinvested. For dividend-distributing ETFs this only happens if you manually reinvest or use a broker auto-reinvest feature. For accumulating ETFs it is automatic.
• No fees of any kind. No broker commissions, no ETF total expense ratio (TER), no spread costs, no currency conversion fees.
• No taxes. No capital gains tax, no dividend withholding, no wealth tax, no exit tax.
• No inflation adjustment. The final value is in nominal EUR — tomorrow’s euros, not today’s purchasing power.
• Contributions stay constant. No salary growth, no annual deposit increases (unless you explicitly model them).

What the calculator does NOT account for

Each of these limitations can meaningfully change your real outcome. Treat the calculator’s number as a ceiling, not a forecast.

Inflation. Euro area HICP inflation has averaged roughly 2% over the long run per ECB data, though we saw 8–10% spikes in 2022–2023. If you project a 30-year horizon at 7% nominal and inflation runs at 2.5%, your real return is closer to 4.4% — meaningfully lower. To approximate real purchasing power, rerun the calculator with (nominal rate minus expected inflation) as your input.

Taxes. Tax drag varies wildly by country. A Lithuanian investor in a UCITS accumulating ETF pays 15% capital gains tax on realised profit. A German investor pays Abgeltungsteuer of roughly 26.4% on dividends and realised gains, partially offset by the Vorabpauschale and partial exemption. A French investor in a PEA can be near-zero after 5 years on qualifying ETFs. See our ETF tax efficiency guide for jurisdiction-specific detail.

Broker fees. Trade Republic and Scalable Capital charge 0 EUR on most savings-plan ETF purchases — the friction is the spread and EUR/USD conversion on US-domiciled holdings. Interactive Brokers charges around 0.05% with a low minimum but you pay for the platform’s institutional access. XTB offers commission-free ETF trading up to EUR 100k monthly turnover. Over 30 years even 0.3% annual fee drag can cost you 8–10% of your final pot.

Related reading: Low-Maintenance ETF Portfolios for European Investors.

Sequence-of-returns risk. A 30% crash in your final accumulation year hurts vastly more than the same crash in year one. The calculator’s smooth line hides this entirely.

ETF dividend withholding tax. Irish-domiciled UCITS ETFs holding US equities benefit from the US-Ireland tax treaty (15% withholding instead of 30%). Luxembourg domicile, by contrast, suffers the full 30%. This is a permanent drag on returns the calculator never sees. The justETF database at justetf.com shows domicile for every UCITS ETF.

Currency risk. If you invest in a USD-hedged or unhedged S&P 500 ETF as a EUR investor, your final value depends partly on EUR/USD over 30 years. The calculator implicitly assumes one currency.

How to execute compound growth in practice

A calculator is planning. Execution is automation. The single highest-leverage step you can take after running these numbers is to set up an automated monthly transfer into a diversified ETF savings plan, so the formula’s “PMT” variable becomes a fact of life rather than a monthly decision. Our deep guides on ETF dollar-cost averaging and ETF savings plans for automating wealth-building walk through the full mechanics.

For European investors, the two brokers I most often recommend for monthly DCA execution are:

Open Trade Republic — 0 EUR savings plans

Open Freedom24 — EU + US ETF access

Related reading: Currency overlay strategies for EU equity-heavy portfolios.

For higher-volume investors or those needing access to US-domiciled ETFs and advanced order types, Interactive Brokers and XTB are also worth evaluating. Disclosure: these are affiliate links — we may earn a referral fee at no cost to you. See our affiliate disclosure.

Common compound growth mistakes I have seen in 11 years of investing

I started investing in 2014 with roughly EUR 8,000 across a Lithuanian brokerage account. Over the next eleven years I made every mistake on this list at least once — and watched dozens of readers and Substack subscribers make them too.

1. Chasing fantasy return assumptions. Plugging 10% or 12% into the calculator because “the S&P returned 10% historically” ignores fees, EUR currency drag, and the fact that the 1980–2000 bull run is not repeatable on demand. I now model 6–7% as base case.
2. Abandoning DCA during downturns. March 2020, late 2022, and early 2025 each tested resolve. The investors who paused contributions missed exactly the months that did the most compounding work later. The formula does not care how you feel.
3. Ignoring inflation. A EUR 500k pot in 30 years sounds enormous until you realise 2.5% inflation cuts its real purchasing power roughly in half.
4. Wrong ETF domicile. I held a Luxembourg-domiciled US equity ETF for two years before switching to an Irish-domiciled one with treaty access. That switch alone is worth roughly 30 basis points per year — nearly 10% of final value over 30 years.
5. Not reinvesting dividends. In year one this looks trivial. In year 25 it is the difference between a comfortable retirement and a tight one. Use accumulating (Acc) UCITS ETFs unless you actively need the cash flow.

Next steps

If you are early in your investing journey, the natural follow-up is our European ETF investing beginner roadmap for 2026 — it walks through broker choice, ETF selection, and tax basics in a single flow. If you already have a broker and want to design the actual portfolio you will be feeding monthly contributions into, see our balanced ETF portfolio for European investors. Dividend-focused readers should also review our best dividend ETFs hub, where dividend reinvestment is the practical lever that turns the formula above into real cash flow.

Related reading: QQQ3 ETF DCA Investing Strategy For Best Results.

Frequently asked questions

What is compound growth in plain English?

Compound growth is when the returns your investments earn start earning their own returns. Year one you earn 7% on your principal. Year two you earn 7% on principal plus year-one earnings. Over decades the formula grows exponentially rather than linearly, which is why time matters more than the size of any single contribution.

What annual return should I assume for European ETFs?

I model 6% to 7% nominal for a globally diversified equity ETF portfolio in EUR. Cautious investors should use 5%. The long-run real return (after inflation) for global equities is closer to 4–5%. Avoid plugging in 9%+ unless you are deliberately stress-testing an optimistic case.

Should I include inflation in my projection?

Yes, if you want to understand purchasing power in today’s terms. Run the calculator twice: once with your nominal expected return, once with (nominal − 2.5%) as your inflation-adjusted real return. The second number tells you what your final pot is worth in 2026 euros.

How do taxes affect compound growth in Europe?

Significantly, and the impact varies by country and ETF structure. Accumulating UCITS ETFs typically defer tax until sale. Distributing ETFs trigger annual dividend tax. Irish domicile saves 15 percentage points of US dividend withholding versus Luxembourg. See our ETF tax efficiency guide for jurisdiction-specific detail.

What broker is best for monthly DCA in Europe?

For low-cost automated savings plans, Trade Republic and Scalable Capital lead in Germany, Austria, France, Italy, Spain and several other EU countries with 0 EUR commission on most ETFs. Freedom24 offers broad EU and US ETF access. Interactive Brokers is the choice for higher volumes and advanced needs.

Does the Rule of 72 work for any return rate?

It is accurate within roughly 1% for rates between 4% and 12%, which covers almost every realistic equity assumption. Outside that range — very low rates like 1% or very high like 20% — the approximation drifts. For ETF planning purposes it is essentially exact.

Why does starting early matter so much?

Because the formula multiplies time as an exponent. A euro invested at age 25 compounds for 40 years to retirement at 65. A euro invested at age 45 only compounds for 20 years. At 7% the first euro becomes EUR 14.97; the second becomes EUR 3.87. Same euro, same rate, four times the outcome — entirely because of time.

Is compound growth realistic for a 30-year horizon?

Yes, but with caveats. Equity markets have delivered roughly 6–8% real returns globally over multi-decade rolling periods, but with severe drawdowns along the way. A 30-year compound projection is reasonable as a planning baseline, provided you stay invested through downturns and rebalance periodically.

Sources and further reading

• Bogleheads wiki — Compound interest
• US SEC investor.gov — Official compound interest calculator
• Wikipedia — Rule of 72
• justETF — UCITS ETF data and domicile lookup
• European Central Bank — Euro area inflation data
• ESMA — EU financial markets regulator

The compound growth formula (and how to calculate it by hand)

The compound growth formula is: Final value = Start value × (1 + r)ⁿ, where r is the annual return and n the number of years. To calculate compound growth in reverse — finding the annual rate that turned one amount into another — use CAGR: (Final ÷ Start)^1/n − 1.

Example: €10,000 growing at 7% for 20 years = 10,000 × 1.07²⁰ ≈ €38,697. The same journey backwards: (38,697 ÷ 10,000)^1/20 − 1 = 7%. The calculator above does both, including monthly contributions — something the plain formula can’t handle without a second term.

Related reading: Polish IKE and IKZE.