Try a real example
Each link below opens the calculator with a fully-loaded scenario. Edit the numbers from there, or copy the URL to share.
How to use this compound interest calculator
Enter an initial deposit, an annual interest rate, the number of years to project, and (optionally) a recurring contribution. Pick a compounding frequency (monthly is the most common default for savings accounts). The chart and year-by-year table update live as you type. Click the + button next to the series tabs to add a second scenario — for example, "save £500/month at 7%" versus "save £750/month at 5%" — and compare them on the same chart.
What is compound interest?
Compound interest is interest earned on both the original deposit and on previously earned interest. Each compounding period, the balance grows; the next period's interest is calculated on that larger balance. Over long horizons, this produces the exponential growth curve you see in the chart above.
The standard formula for compound interest is:
A = P (1 + r/n)n·t
- A — final balance (future value)
- P — principal (initial deposit)
- r — annual interest rate, as a decimal (e.g. 7% = 0.07)
- n — number of compounding periods per year
- t — number of years
When you add regular contributions, the calculator works period-by-period: each month it adds the new interest, then (if a contribution is due) adds the contribution, before moving to the next month.
Worked examples
1. £10,000 lump sum for 30 years at 7%
With monthly compounding and no further contributions, £10,000 grows to roughly £81,165 after 30 years. The growth is entirely driven by reinvested interest — the principal is unchanged but the balance has multiplied roughly eight-fold. Open this scenario →
2. £500/month for 30 years at 7%
Saving £500 a month at 7% (monthly compounding) reaches approximately £612,000 after 30 years. You will have contributed £180,000 of your own money; the remaining ~£432,000 is interest. This is the value of starting early. Open this scenario →
3. The cost of waiting five years
The same £500/month plan, delayed by five years (so you save for 25 years instead of 30) reaches roughly £406,000 — about £206,000 less. Use the Delay (yrs) field in the calculator to model this directly. Open this scenario →
Comparing scenarios side-by-side
Most compound interest calculators show one scenario at a time. This one is built to compare. Add a series for each plan you want to consider — different rates, different monthly amounts, different time horizons — and they appear on the same chart with distinct colors. Toggle Show on chart to keep a series saved but hide it temporarily. When you find a comparison worth keeping, click Copy shareable link: the full state of the calculator is encoded into the URL.
Frequently asked questions
How is compound interest different from simple interest?
Simple interest is calculated only on the original principal, so the balance grows linearly. Compound interest is calculated on the running balance, so the balance grows exponentially. Over long horizons the difference is enormous.
How often should interest compound?
More frequent compounding produces slightly higher returns, but the difference shrinks fast. Monthly compounding is the standard assumption for retail savings accounts and a good default for planning.
What is the Rule of 72?
A shortcut for estimating how long a balance takes to double: divide 72 by the annual rate (in percent). At 6% a balance doubles every ~12 years; at 9%, every ~8 years.
Can I model withdrawals?
Yes — enter a negative contribution. The calculator treats a negative contribution as a regular withdrawal at the chosen frequency.
What does "Delay (yrs)" mean?
It postpones the start of the plan. During the delay, nothing is invested. The initial deposit lands at the end of the delay and contributions begin from there. Use it to compare starting now versus starting later.
Does this calculator account for inflation or taxes?
No. Results are nominal (pre-tax, pre-inflation). To estimate real returns, subtract your expected inflation rate from the nominal rate before entering it. For tax-deferred accounts (ISA, 401k, IRA, Roth) the nominal figure is usually appropriate.
Is my data saved or shared?
No. The calculation runs entirely in your browser. Inputs are encoded into the page URL so you can bookmark or share scenarios, but nothing is sent to a server.
How accurate is this calculator?
Math is exact for the model. Real investments — index funds, savings accounts, bonds — will vary period-to-period; this tool assumes a steady annualized rate. Use it for planning, not as a forecast.
Further reading and videos
External resources from authoritative sources on compound interest and long-term investing:
Articles
- Investopedia — Compound Interest — definition, formula, and worked examples.
- SEC Investor.gov — Compound Interest Calculator — the U.S. SEC's own calculator with a short explainer.
- NerdWallet — What is compound interest? — beginner-friendly overview.
- Bankrate — Compound Interest Explained — examples and how-to.
Videos
- YouTube — The power of compound interest — short explainer on why starting early matters.
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