How compound interest works
With compound interest, the interest you earn is added to your balance and earns interest itself in the next period. The formula for a single deposit is: final amount = P × (1 + r/n)n×t, where P is the starting amount, r the annual rate, n the number of compounding periods per year and t the number of years.
Example: €10,000 at 3 % for 10 years with yearly compounding grows to about €13,439. With simple interest (no compounding) it would be €13,000. The difference grows the longer the term and the higher the rate.
Why monthly deposits matter
Regular deposits usually contribute more to the final balance than the interest rate itself. €100 per month for 20 years at 3 % with monthly compounding adds up to about €32,800, of which €24,000 are your deposits and around €8,800 interest.
The rule of 72
To estimate how long it takes to double your money, divide 72 by the annual interest rate. At 3 % it takes about 24 years, at 6 % about 12 years.
Inflation and tax
Real growth is the interest rate minus inflation. If your savings earn 2.5 % and inflation is 3 %, your purchasing power falls. Interest is also taxed in most countries; enter your country's rate in the tax field (Croatia: 12 % on interest).
Frequently asked questions
What is compound interest?
Is monthly or yearly compounding better?
How long does it take to double money at 4 %?
Is interest on savings taxed in Croatia?
Updated: November 2026 · Supremio Digital, Zagreb
