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Every term starts with what it actually means. Every calculator shows more than the answer: the formula and the working, so you can check it yourself.
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Portfolio value
€167,072
Interest earned: €109,072
Portfolio value in 20 years: €167,072. Interest earned: €109,072.
Opening deposit €10,000, 8% a year.
Open the calculatorWhat time does to money
€10,000 to start and €200 every month at 7% a year. For the first few years it looks like nothing is happening, and that is exactly what makes most people give up before the effect arrives.
Value after 30 years
€325,159
- Portfolio value €325,159
- Your contributions €82,000
The dashed line is what you put in. The coloured curve is what the portfolio is worth. The gap between them, €243,159, was not created by your contributions but by time.
Show as a table
| Year | Your contributions | Portfolio value |
|---|---|---|
| 5 | €22,000.00 | €28,494.83 |
| 10 | €34,000.00 | €54,713.58 |
| 20 | €58,000.00 | €144,572.72 |
| 30 | €82,000.00 | €325,159.17 |
Calculators
Interactive calculators with the steps explained, the formulas shown and the results charted. Every calculation shows its working, not just its answer.
Financial terms explained in plain language
No formulas, no textbook definitions. Every term starts with what it actually means and ends with an example that makes it click.
Compound interest
When your money earns something, what it earned is added to the original amount. Next time you are earning on a bigger base, and then on a bigger one again. It looks unremarkable at first, but after enough years the growth speeds up noticeably.
Example: It works like a snowball rolling downhill. The bigger it gets, the more snow it picks up on every turn, and by the bottom of the slope it is a boulder.
Inflation
Prices in the shops rise over time, so the same banknote buys less in a few years than it does today. Nobody took your money away, it simply lost part of its power. That is why putting cash aside is not enough on its own over the long run.
Example: A bread roll that once cost a few cents costs far more today. The hundred euros left in a drawer has not shrunk, but it buys considerably less than it did ten years ago.
Discounting
Money you will not receive for several years is worth less to you today than the same amount right now. You have to wait for it, and in the meantime it could have been working somewhere else. Discounting is the calculation that converts a future sum into today's value.
Example: A thousand euros today beats a thousand euros in five years. That is why you would pay less than a thousand today for the promise of it.
Effective interest rate
Banks add interest at different intervals, some once a year, others every month. Two offers showing the same number on the leaflet can therefore differ in practice. The effective rate converts them into one comparable figure per year.
Example: It is the price per kilo rather than the price per pack. Only then do you know which offer is genuinely better, even when both looked identical on the leaflet.
Annuity
An annuity is a payment that stays the same size throughout. That is what lets you budget for it precisely. What changes is the split inside it: at the start most of it goes on interest, and gradually more and more goes on the debt itself.
Example: A mortgage payment stays flat for years, €600 a month today and €600 a month a decade from now, even though the debt has been falling the whole time.