Compound Interest Calculator โ Renters Rente
Compound interest is the process where interest earned on an investment is reinvested, so that in the next period you earn interest on both the original amount and the previously earned interest. This creates exponential growth over time. Albert Einstein allegedly called compound interest the eighth wonder of the world, and this calculator shows you exactly why โ enter a starting amount, annual interest rate and time horizon to see your money grow year by year.
How Compound Interest Works
If you invest 50,000 kr at 7% annual return, after the first year you have 53,500 kr. In the second year, you earn 7% on 53,500 kr (not just 50,000 kr), giving you 57,245 kr. Each year the growth accelerates because the base amount keeps increasing. After 20 years at 7%, your 50,000 kr grows to approximately 193,484 kr โ nearly four times the original amount โ without adding a single krone in additional deposits.
Compound Interest and Long-Term Investing
The most important factor in compound interest is time. The longer your money stays invested, the more dramatic the compounding effect becomes. This is why starting to invest early, even with small amounts, is so powerful. In Denmark, historically, broadly diversified equity investments have returned an average of 7-10% annually over long periods, though past performance does not guarantee future results. Use this calculator to visualize how your investment could grow over different time horizons.