Compound Interest Calculator
Watch compounding work over time across daily, monthly, quarterly or annual periods.
About Compound Interest Calculator
Compound interest earns interest on both your principal and previously earned interest. Adding regular contributions accelerates growth dramatically over time thanks to compounding.
Formulas
Future value of principal
A = P × (1 + r/n)^(n·t)
- A
- Future value of principal
- P
- Initial principal
- r
- Annual interest rate (decimal)
- n
- Compounding periods per year
- t
- Years
Future value of regular contributions
FV_C = PMT × ((1 + i)ᴺ − 1) / i
- FV_C
- Future value of all contributions
- PMT
- Contribution per compounding period
- i
- Periodic rate = r/n
- N
- Total compounding periods = n × t
Worked example
With the default values below, Compound Interest Calculator returns Future Value of $170,619.05. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Initial Amountaccepts 0–10,000,000 $
- 10,000 $
- Monthly Contributionaccepts 0–100,000 $
- 250 $
- Annual Interest Rateaccepts 0–30 %
- 7 %
- Yearsaccepts 1–60 years
- 20 years
- Compoundingone of Monthly, Quarterly, Annually, Daily
- Monthly
Results
- Future Value
- $170,619.05
- Total Contributions
- $70,000
- Total Interest Earned
- $100,619
Step by step
- 1Periodic rate: Annual rate ÷ compounding periods (monthly)= 0.5833%
- 2Future value of principal: P × (1 + i)ᴺ= $40,387.39
- 3Contribution per compounding period (monthly → monthly)= $250.00
- 4Future value of contributions: PMT × ((1 + i)ᴺ − 1) / i= $130,231.66
- 5Total future value= $170,619.05
- 6Total interest earned: Future Value − Total Contributions= $100,619
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or fees or charges into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- Projections are estimates and assume a constant rate of return, which real investments do not guarantee.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Compound Interest Calculator — full guide
Why compounding beats intuition
Simple interest pays only on the original amount. Compound interest pays on the amount *plus* all interest already earned, so the balance grows on a curve rather than a line.
£10,000 at 7% for 30 years:
- Simple interest — £31,000
- Compounded annually — £76,123
The extra £45,000 is interest earning interest. Nothing was added; only the compounding differs.
Frequency matters less than people expect
More frequent compounding helps, but with diminishing returns. £10,000 at 5% for 10 years:
| Frequency | Balance |
|---|---|
| Annually | £16,289 |
| Quarterly | £16,436 |
| Monthly | £16,470 |
| Daily | £16,487 |
| Continuously | £16,487 |
The gap between annual and monthly is real; between daily and continuous it is negligible. Rate and time dominate frequency by a wide margin.
The Rule of 72
Divide 72 by the annual rate to approximate the doubling time. At 6%, money doubles in about 12 years. At 9%, about 8. It is accurate enough for mental arithmetic in the 4–12% range and is the fastest way to sanity-check any growth claim.
Time is the variable that matters most
Two savers, both contributing £200 a month at 7%:
- Starts at 25, stops at 35 — contributes £24,000, has about £300,000 at 65
- Starts at 35, contributes until 65 — contributes £72,000, has about £244,000
The first saver contributes a third as much and ends up with more, purely because the money had ten extra years to compound. This is the strongest argument for starting early that exists.
What erodes it
- Inflation. A 7% return with 3% inflation is roughly 4% in real terms.
Always reason in real returns for long horizons.
- Fees. A 1% annual fee sounds small and removes roughly a quarter of the
final balance over 30 years, because the fee compounds too.
- Tax on gains, unless the account is sheltered.
Related tools
- Investment calculator for regular contributions
- Retirement calculator for drawdown planning
- Inflation calculator for real purchasing power
Guides that use this calculator
Projections are estimates and assume a constant rate of return, which real investments do not guarantee.
Frequently Asked Questions
What does compounding frequency change?
More frequent compounding (e.g. daily vs annually) slightly increases your returns because interest is calculated and added more often.
Are contributions added monthly?
Yes, contributions are treated as monthly deposits and grow with the same rate until the end of the period.
Does the Total Interest Earned figure include growth on my contributions?
Yes. On the defaults — $10,000 initial, $250 a month, 7%, 20 years, monthly compounding — the future value is $170,619.05 and total contributions are $70,000, so Total Interest Earned is $100,619.05. That covers growth on the starting balance and on every deposit for however long it was invested. The $10,000 alone grows to $40,387.39; the deposits account for $130,231.66.
What does starting five years later cost me?
Running the same inputs for 15 years instead of 20 gives $107,730.04 rather than $170,619.05 — a $62,889 difference for $15,000 less contributed. The five missing years are the ones where the balance was largest, so they would have earned the most. Delay is expensive at the end of the period, not the beginning.
How long does the initial $10,000 take to double on its own?
At 7% compounded monthly, about 9 years and 11 months, ignoring contributions. The rule of 72 estimates 72 ÷ 7 ≈ 10.3 years, which is close enough for mental arithmetic but slightly pessimistic because monthly compounding beats annual. Over the full 20 years the $10,000 roughly quadruples, reaching $40,387.39.
Are my contributions adjusted for inflation or future pay rises?
No — the $250 monthly figure stays flat for all 20 years, and the result is in nominal money. At 3% inflation, the $170,619.05 projection would buy about what $94,468 buys today. To keep the comparison honest, either enter a return net of inflation or raise the contribution periodically and rerun. This is a projection, not a guarantee.