Compound Interest Calculator
Enter your starting capital, what you will add each month, the interest rate and the term, and you'll see how much you'll have at the end and how much of it is interest.
Enter a deposit or a monthly contribution, the interest rate and the number of years.
Gross result, before taxes. Add an inflation rate to also see what it is worth in today’s money.
Year-by-year breakdown
Enter a deposit or a monthly contribution, the interest rate and the number of years.
Results are estimates. Solvemis accepts no responsibility for the results obtained or for how they are used. Always double-check the result and talk to a qualified professional before making decisions.
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How it works
How to use it
- Enter the capital you start with and what you'll add each month. You can leave one of the two blank.
- Enter the annual interest rate and the number of years.
- Choose how often interest compounds and whether you contribute at the start or end of each month.
- To see what it will be worth in today's money, enter the average inflation you expect. The Bank of Mexico's target is 3%.
- You'll see the final capital, how much you put in and how much is interest, with a chart of the growth. Open the table to see it year by year.
How it is calculated
It's simulated month by month. The annual rate is converted into its monthly equivalent according to the compounding frequency, (1 + rate/n)^(n/12) − 1, and each month it's applied to the balance and the contribution is added. Without contributions, the result matches the classic compound interest formula exactly. If you enter inflation, each balance is divided by (1 + inflation)^years to express it in today's money.
Final capital = C × (1 + rate/n)^(n × years)
Sources
- Ganancia Anual Total (GAT) — Bank of Mexico
- El esquema de objetivos de inflación en México — Bank of Mexico
- Compound Interest Calculator — U.S. Securities and Exchange Commission (Investor.gov)
About this calculator
What compound interest is
Compound interest means that interest is added to the capital and in turn earns new interest. In the first year you earn interest on what you put in; in the second, on what you put in plus the first year’s interest; and so on. The effect is small at first and huge over time.
An example with this calculator’s figures: MX$100,000 at 5% for 10 years, compounded monthly, becomes MX$164,701. If you also add MX$1,000 a month, you end up with MX$319,983: you put in MX$220,000 and almost MX$100,000 is interest.
The factor that matters most: time
The formula raises growth to a power that depends on the years. That’s why starting earlier matters more than contributing more. A quick reference is the rule of 72: divide 72 by the interest rate and you get, roughly, the years it takes capital to double. At 5%, about 14 years; at 8%, about 9.
Nominal rate, effective yield and compounding
The nominal annual rate is the percentage agreed. The effective yield shows what it really earns in a year, taking into account how often interest compounds:
| Compounding | 5% nominal equals |
|---|---|
| Annual | 5.00% effective |
| Quarterly | 5.09% effective |
| Monthly | 5.12% effective |
| Daily | 5.13% effective |
In Mexico, banks and other institutions quote the nominal GAT, which also deducts fees, and the real GAT, which deducts expected inflation. When you compare products, compare GAT with GAT. In the calculator you enter the nominal rate and choose the frequency; the result already includes that effect.
Contributing at the start or end of the month
If you contribute at the start of each month, that money earns interest for the whole month; if you do it at the end, it starts earning the following month. The difference is small but it adds up: with MX$1,000 a month for 10 years at 5%, contributing at the start gives about MX$647 more.
Inflation: what your money will be able to buy
A peso in 20 years won’t buy the same as today. If you enter the average inflation you expect, the calculator adds a dotted line to the chart and one more row to the result with the value in today’s money: each balance is divided by (1 + inflation) raised to the years elapsed.
The gap between the two curves is what inflation eats. And if interest doesn’t beat inflation, capital grows in pesos but loses purchasing power: at 3% interest with 3% inflation, in 10 years you’ll have more pesos than now and be able to buy practically the same.
For reference, the Bank of Mexico targets annual inflation of 3%, with a range of one percentage point either way. In particular periods it can be very different.
What the result doesn’t include
- Taxes: in Mexico interest is subject to income tax (ISR) and banks withhold part of it during the year.
- Inflation, if you don’t enter it: without it, the result is in pesos of each moment, not in today’s purchasing power.
- Fees: in funds and plans, management fees come straight off the return.
- Variable returns: the calculator assumes a fixed rate. In investments such as funds or shares, the return changes every year and can be negative; the result is an estimate, not a forecast.
Frequently asked questions
What is the difference between simple and compound interest?
With simple interest, interest is always calculated on the starting capital. With compound interest it is added to the capital and in turn earns new interest. Over 10 years at 5%, MX$100,000 becomes MX$150,000 with simple interest and MX$162,889 with annual compounding.
Which is better, monthly or annual compounding?
At the same nominal rate, the more often interest compounds, the more you earn, because interest starts earning interest sooner. That's why in Mexico banks quote the GAT (Ganancia Anual Total, total annual yield), which takes that frequency and fees into account: 5% nominal compounded monthly earns an effective 5.12% a year.
Does the result include taxes?
No, it's gross. In Mexico interest is subject to income tax (ISR) and banks withhold part of it during the year. Your real net capital will be somewhat lower, depending on your product and tax situation.
What about inflation?
It's only deducted if you enter it. In that case you'll also see what the final capital is worth in today's money: MX$164,701 in 10 years' time, with average inflation of 3%, buys the same as MX$122,553 today. For reference, the Bank of Mexico's inflation target is 3%.
Updated October 1, 2026
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