Compound Interest Calculator
See how a starting balance and regular deposits grow, broken down year by year.
Growth year by year
| Year | Opening | Deposits | Interest | Closing |
|---|---|---|---|---|
| 1 | 100,000,000 | 60,000,000 | 7,845,593 | 167,845,593 |
| 2 | 167,845,593 | 60,000,000 | 12,030,161 | 239,875,754 |
| 3 | 239,875,754 | 60,000,000 | 16,472,823 | 316,348,577 |
| 4 | 316,348,577 | 60,000,000 | 21,189,500 | 397,538,077 |
| 5 | 397,538,077 | 60,000,000 | 26,197,091 | 483,735,168 |
| 6 | 483,735,168 | 60,000,000 | 31,513,539 | 575,248,706 |
| 7 | 575,248,706 | 60,000,000 | 37,157,893 | 672,406,600 |
| 8 | 672,406,600 | 60,000,000 | 43,150,380 | 775,556,979 |
| 9 | 775,556,979 | 60,000,000 | 49,512,469 | 885,069,449 |
| 10 | 885,069,449 | 60,000,000 | 56,266,959 | 1,001,336,407 |
How it works
Compound interest is interest added to the balance, so the next period earns interest on that interest too. The gap against simple interest is small over a few periods and widens with time — which is why the horizon matters more than the rate.
This calculates two things at once: a lump sum left to grow, and a regular contribution paid in every period. For most people the contribution does most of the work — in the example below, the opening 100 million grows to 182 million while the 600 million of monthly deposits produces the rest.
Compounding and contributions run on the same cadence here: choose monthly compounding and the money goes in monthly. That is what "monthly deposits at a monthly rate" means to anyone using it. Letting the two cadences diverge gives a number that is mathematically defensible but matches no actual account, so it is deliberately not offered.
Timing within the period matters too. A contribution at the start earns interest that period; one at the end waits until the next. The difference is exactly one period of interest on every deposit, which over years becomes visible.
The rate you enter is a nominal annual rate, divided evenly across the periods in a year. Compounding 6% a year monthly yields an effective 6.17% — higher than the number on the rate card, and that is compounding rather than an error.
Formula
Final balance = P × (1 + r)ⁿ + PMT × ((1 + r)ⁿ − 1) ÷ r (contributions at period end)
P is the opening amount, PMT the contribution per period, r the periodic rate = annual rate ÷ periods per year, n the total number of periods. Contributions at the start of each period multiply the second term by (1 + r).
Worked example
A 100 million opening balance, 5 million added monthly, 6% a year compounded monthly, over 10 years:
- Total paid in
- 700,000,000 đ
- The opening 100 million after 10 years
- 181,939,673 đ
- Interest earned
- 301,336,407 đ
- Final balance
- 1,001,336,407 đ
One billion after ten years: 700 million of it your own money and just over 301 million interest. Note that the opening 100 million produced only 82 million of that — the habit of depositing monthly, not the starting capital, is what carried the result.
Frequently asked questions
How is compound interest different from simple interest?
Simple interest is always charged on the original principal. Compound interest is charged on the principal plus all interest added so far. On 100 million at 6% over 10 years, simple interest gives 60 million; monthly compounding gives nearly 82 million.
Is monthly, quarterly or annual compounding better?
More frequent compounding yields more, but the gap is smaller than people expect: 6% a year is 6.00% compounded annually, 6.14% quarterly and 6.17% monthly. Match the cadence your bank actually uses rather than picking the highest.
Should contributions go in at the start or the end of the period?
The start is better, because each deposit earns one extra period of interest. For monthly deposits at 6% the difference is about 0.4% of the final balance — small, but free if you get to choose the date.
What rate should I use to be realistic?
Vietnamese 12-month term deposits have typically run around 5–6% a year and move over time. Do not put an equity-market or long-run expected return into a savings-account projection: the number will look good and will not happen.
Does the result account for inflation?
No — these are nominal figures. For purchasing power, enter a real rate: nominal minus expected inflation. At 6% interest and 4% inflation, rerun at 2% to see the more sobering number.
Is the interest taxed?
In Vietnam, interest an individual earns on deposits at a credit institution is exempt from personal income tax. Interest from corporate bonds and other investments is not. No tax of any kind is applied to the figures here.
Why does the final year add so much more than the first?
Because each year’s interest is charged on that year’s opening balance, which keeps growing. In the example the first year earns about 7.8 million; the last years earn several times that at the same rate.