Compound interest calculator
Compound interest works in both directions: it grows savings invested over the years — and by the exact same mechanism it makes long debt more expensive. The calculator below shows how an initial sum and a monthly deposit grow over time, at a given annual return. That understanding is surprisingly relevant to your mortgage decisions too.
Compound interest calculator
How an initial sum and a monthly deposit grow over time with compound interest.
| Year | Deposited | Value |
|---|---|---|
| 1 | ₪62,000 | ₪64,837 |
| 2 | ₪74,000 | ₪80,433 |
| 3 | ₪86,000 | ₪96,827 |
| 4 | ₪98,000 | ₪114,060 |
| 5 | ₪110,000 | ₪132,174 |
| 6 | ₪122,000 | ₪151,215 |
| 7 | ₪134,000 | ₪171,230 |
| 8 | ₪146,000 | ₪192,270 |
| 9 | ₪158,000 | ₪214,386 |
| 10 | ₪170,000 | ₪237,633 |
| 11 | ₪182,000 | ₪262,069 |
| 12 | ₪194,000 | ₪287,756 |
| 13 | ₪206,000 | ₪314,757 |
| 14 | ₪218,000 | ₪343,140 |
| 15 | ₪230,000 | ₪372,974 |
| 16 | ₪242,000 | ₪404,335 |
| 17 | ₪254,000 | ₪437,300 |
| 18 | ₪266,000 | ₪471,952 |
| 19 | ₪278,000 | ₪508,377 |
| 20 | ₪290,000 | ₪546,666 |
For illustration only · not advice and not a commitment
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What compound interest is
Compound interest is interest that accrues on the interest already accrued — not only on the original principal. In the first years the effect is modest, but as time passes the curve bends upward: the gains generate gains of their own. That's why the two strongest variables in long-term saving are time and consistency — more than the size of the deposit itself.
What does this have to do with a mortgage?
When free money comes your way, a classic question arises: prepay part of the mortgage or invest? The answer compares two opposing compound-interest mechanisms — the interest you'd save on the debt (certain, at your mortgage rate) against the return you might earn by investing (uncertain, depending on the market, tax and horizon).
The calculator helps run the scenarios and see orders of magnitude. The decision itself also depends on early-repayment fees, the state of your mix, and the level of risk you're comfortable living with — exactly the kind of questions examined in a consulting call.
Frequently asked questions
What annual return should I enter in the calculator?
There's no single "right" return — the return depends on the investment channel, the risk level and the period, and past returns guarantee nothing about the future. A useful approach is to run several scenarios — conservative, reasonable and optimistic — and look at the range of outcomes instead of fixating on one number.
Is it better to prepay the mortgage early or invest the money?
It's a comparison between certain savings (the interest on the repaid debt, net of early-repayment fees) and an uncertain return on an investment (after tax). The higher your mortgage rate, the more attractive prepaying becomes — and vice versa. There's no uniform answer: the right one depends on your mix, the fees, tax and your relationship with risk.