Compound interest calculator

Each month, interest = balance × (annual rate ÷ 12) is added, then contributions are deposited. For yearly deposits, contributions are added once at the start of each year. Tax is applied as rate × cumulative returns. Inflation is discounted by dividing by (1 + inflation/12) each month.

For most Korean bank deposits and savings accounts, 14% income tax + 1.4% local tax = 15.4% applies. Tax-exempt products, ISA accounts, overseas ETFs, and stock capital gains use different rates — enter the appropriate rate for your product.

Real value is purchasing power expressed in today's money. For example, ₩100M in 30 years with 2.5% annual inflation is worth only about ₩47.5M in today's purchasing power.

Returns and inflation will vary in the future, so this calculator gives estimates based on your assumptions. For major financial decisions, consult a tax advisor or financial professional.

On ₩100M at 5% over 30 years: simple interest gives ₩100M × (1 + 0.05 × 30) = ₩250M, while compound gives ₩100M × 1.05^30 ≈ ₩432M — a ₩182M gap. The gap grows exponentially with time, which is why compounding is decisive for long-term investing.

At a 7% annual return (close to the long-term S&P 500 average), you'd accumulate about ₩1.22B (pre-tax, before inflation). At a 4% Korean savings rate, about ₩700M. The same contribution nearly doubles depending on the product — compare both right above.

ISA gives ₩2M (general) or ₩4M (basic-income) tax-free, with 9.9% separate taxation on the excess — vs. 15.4% in regular accounts. Over 30 years the difference compounds significantly. Set the tax rate to 9.9% or 0% in the calculator to compare. ISA has a 3-year minimum holding period and a ₩20M annual contribution cap.

Years to double ≈ 72 ÷ annual rate (%). At 7%, about 10.3 years; at 4%, about 18 years. A quick mental estimate — use this calculator for the exact figure.

The S&P 500 averaged about 10% annually (≈7% real, inflation-adjusted) from 1928–2025. Short-term volatility is high and future returns aren't guaranteed. KOSPI tends to be more volatile, averaging 5–7%. We recommend running a conservative scenario (5–7%) plus an optimistic one (8–10%) to see a realistic range.

This calculator assumes a fixed rate. Real markets fluctuate, so it's safer to run conservative (5%), base (7%), and optimistic (9%) scenarios separately. The 'sequence of returns' risk near retirement is handled in the FIRE calculator instead.