I thought it may be useful to add a compound interest calculator and grid to the website.
I already have a simple one on the website where you can enter your savings amount and see how much you would have after a period of time.
This new one takes it a few steps further.
On the first sheet you can see how much you would have each year, not just at the end.
You can also compare the difference between a one off savings amount vs a regular savings amount.
You can even include withdrawals in the second table too should you anticipate having to interrupt the compounding process with some spending needs.
I find these tables more practical. Most compound interest calculators only allow you to see the final balance. But I think it’s good to see the time between the start and end too.
Other calculators also tend to only include regular contributions of the same amount. Again though, this isn’t practical. As we go through life our incomes tend to increase and we are able to contribute more. Conversely we go through periods in life where we can’t save as much, such as when getting a mortgage and having kids. It’s good to have a table where you can change your contribution amounts over time to reflect predicted life changes.
I’ve also added columns that show how much total you have contributed over time and how much you have withdrawn. There’s another column also showing how much money you have relative to how much you have put in. This is useful in showing how much interest has contributed to your current balance relative to how much you have contributed. There’s also a column showing how much interest you are expected to receive. The final columns show how much of your savings balance is made up of interest returns and how much is made up of your own contributions. It’s nice to see the growth of interest returns relative to your own contributions over time.
As a nice addition (at least I think it is!), when you click on the second tab down the bottom of the spreadsheet you can see all the values on one page without having to re enter new numbers every time. It shows if you put a lump sum down all the results from returns of 3% to returns of 9%, going up in 1% increments. As well as showing you the difference between monthly, quarterly, or annually compounded savings. This sheet however only refers to one off contributions. It is no good having a sheet like this for regular contributions because there are too many variables based on interest rates and how much you are contributing.
You can find the comprehensive compound interest calculator here.
Have a play and let me know if there is any feedback or improvement suggestions you have. Please feel free to share amongst your friends and family. It makes for riveting dinner conversations.
For more information on the importance of compound interest, then have a read of this article.
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The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here