How is monthly compounding calculated?

If you enter an annual rate of 12% as a nominal rate and choose monthly compounding, 1% is applied each month. After 12 months the effective annual rate is about 12.68%. This is different from dividing an effective 12% annual rate by 12.

Do monthly contributions compound too?

Contributing every month is a way of paying in; compounding means the return earned on each contribution is included in the next calculation. semku shows the initial principal, the contributions and the expected return separately.

Can I let a lump sum grow for a while before I start contributing monthly?

Enter the number of months in Deferral before contributions. During the deferral only the initial principal is calculated, and monthly contributions are applied at the chosen timing from the month after the deferral ends.

Can I compound 1% per day?

Daily compounding is not supported at the moment. A high short-term rate repeated over a long period does not represent a real return, and the rate you enter is not a guaranteed value.

Can I calculate contributions that differ from month to month?

The contributions tab currently supports only the same amount every month. Entering an arbitrary average of differing monthly amounts gives a different result, so it is not presented as a supported calculation.

Compound interest calculator

Enter the principal, rate of return and period to see the expected result for a lump sum and for monthly contributions, shown separately.

Principal

Rate of return Rate basis

Period Period unit

—

Change calculation settings

Compounding interval

Enter amounts like 1,000 and rates like 5.5.

Compound interest rules in detail

For a lump sum, the same rate is applied to the previous principal and accumulated return at every compounding interval. If you choose an annual rate of 12% compounded monthly, it is treated as a nominal annual rate and 1% is applied 12 times. This differs from an effective annual rate of 12%.

Monthly contributions are supported only with monthly compounding. End-of-month contributions are added after each month’s return is calculated; start-of-month contributions are added before it. During a deferral only the initial principal compounds, and monthly contributions start when the deferral ends.

If the rate is 0%, the principal and contributions are simply added without the division formula. Fractional periods, daily compounding and a remaining period that does not match the compounding interval are not estimated or interpolated. All amounts are before tax and do not account for fees or inflation.

Frequently asked questions

How is monthly compounding calculated?: If you enter an annual rate of 12% as a nominal rate and choose monthly compounding, 1% is applied each month. After 12 months the effective annual rate is about 12.68%. This is different from dividing an effective 12% annual rate by 12.
Do monthly contributions compound too?: Contributing every month is a way of paying in; compounding means the return earned on each contribution is included in the next calculation. semku shows the initial principal, the contributions and the expected return separately.
Can I let a lump sum grow for a while before I start contributing monthly?: Enter the number of months in Deferral before contributions. During the deferral only the initial principal is calculated, and monthly contributions are applied at the chosen timing from the month after the deferral ends.
Can I compound 1% per day?: Daily compounding is not supported at the moment. A high short-term rate repeated over a long period does not represent a real return, and the rate you enter is not a guaranteed value.
Can I calculate contributions that differ from month to month?: The contributions tab currently supports only the same amount every month. Entering an arbitrary average of differing monthly amounts gives a different result, so it is not presented as a supported calculation.

Privacy on this page

Calculations run in your browser. The principal, rate, period and contribution amounts you enter are not sent to the server or saved in browser storage. Reloading the page returns the inputs to their initial state.

To understand how the page is used and to improve the service, this page sends semku’s own usage statistics and automatic error reports. They go only to the dedicated endpoint under semku.com/api/telemetry/v1/. They are not used for advertising or third-party tracking.

The usage statistics include the stage of use (such as starting an operation or requesting a copy), the time it happened and fixed identifiers that distinguish the page and feature. They do not include the amounts, rates or periods you enter, the results or chart shown or the text you copy. Inputs are not sent as hashes or as size categories either. The full URL and search terms are not sent.

Operations and sessions are distinguished by randomly generated identifiers. In the browser these exist only in temporary memory and are not written to cookies or browser storage. No identification based on cookies or combined device characteristics is used.

Error reports contain the error type, code and time, and, where available, a registered program-source identifier with the line and column number. The error message text and stack traces are not sent. Usage statistics and error reports also carry the site identifier, the published build and a random record identifier. IP addresses and user-agent strings are not part of these items.

The feedback form sends the rating you chose and the text you typed in the free-text field when you press the send button. A random ID that distinguishes the submission, the page, site and published build, and the type of request are also sent. There are no fields for your name, email address or phone number, and the values you enter are not attached automatically. Whatever you write in the free-text field is sent as is. Please do not enter personal data, passwords, authentication keys or payment details.

Separately, when you visit the site, the hosting provider records your IP address, the time of the request and user-agent information about your browser and device in Cloudflare Pages’ standard access logs.

For details, see the privacy policy in Korean.

Calculations run in your browser without sending the financial values you enter to the server or storing them. Results are pre-tax estimates based on the assumptions you enter; they do not guarantee or account for actual returns, taxes, fees or inflation.