Lump sum only
- Input
- £10,000 at 6%, monthly, 10 years
- Output
- £18,194
Interest of £8,194 against £6,000 under simple interest. The £2,194 difference is interest earned on interest.
Compound Interest Calculator
A compound interest calculator projects how a balance grows when interest is added back and starts earning interest itself. The trap in most such calculators is mixing conventions: they compound the lump sum yearly but the monthly contributions monthly, producing a figure that matches no real product. Here both use the same frequency, so the projection is internally consistent.
Runs entirely in your browser — your figures are never uploaded.
How is compound interest calculated?
Compound interest is calculated as A = P(1 + r/n)^(nt), where P is the starting amount, r is the annual rate as a decimal, n is how many times a year interest is added, and t is the number of years. £10,000 at 6% compounded monthly for 10 years becomes £18,194.
Projections are arithmetic, not forecasts, and are not financial advice. Actual returns vary and may be negative.
£
£
%
years
%
Raise the contribution each year as income grows
%
Final amount
£50,970
after 10 years
- Total invested
- £34,000
- Growth
- £16,970
- Worth in today's money
- £28,461
after 6% inflation
- Invested — 67%
- Growth — 33%
The maths
Compound Interest Calculator formula
Formula
A = P(1 + r/n)^(nt)
- A
- Final amount
- P
- Principal — the starting amount
- r
- Annual interest rate as a decimal (6% = 0.06)
- n
- Compounding periods per year
- t
- Time in years
Worked example
£10,000 at 6% a year, compounded monthly, for 10 years
Inputs
- Principal (P)
- £10,000
- Annual rate (r)
- 0.06
- Compounds per year (n)
- 12
- Years (t)
- 10
Working
- r/n = 0.06 ÷ 12 = 0.005
- nt = 12 × 10 = 120
- (1 + 0.005)^120 = 1.81940
- A = 10,000 × 1.81940
A = £18,194. Interest earned is £8,194 — compared with £6,000 under simple interest.
How to
How to use the Compound Interest Calculator
- 1
Enter your starting amount
Put in what you have to begin with. This can be zero if you are starting from nothing and only contributing regularly.
- 2
Set the rate and compounding frequency
Enter the annual rate and how often interest is added. More frequent compounding produces slightly more growth for the same headline rate.
- 3
Add regular contributions
Enter any recurring deposit. Choose whether it lands at the start or end of each period — at the start earns one extra period of growth.
- 4
Check the real value
The inflation-adjusted figure shows what the final amount is worth in today's money, which is usually the number that matters.
Reference
£10,000 growth at different rates and compounding frequencies (10 years)
| Rate | Yearly | Quarterly | Monthly | Daily |
|---|---|---|---|---|
| 3% | £13,439 | £13,483 | £13,494 | £13,499 |
| 5% | £16,289 | £16,436 | £16,470 | £16,487 |
| 6% | £17,908 | £18,140 | £18,194 | £18,221 |
| 8% | £21,589 | £22,080 | £22,196 | £22,253 |
| 10% | £25,937 | £26,851 | £27,070 | £27,179 |
Examples
Compound Interest Calculator examples
Compounding frequency matters
- Input
- £10,000 at 6% for 10 years
- Output
- Yearly £17,908 · monthly £18,194 · daily £18,221
The same nominal rate produces different results depending on how often interest is added. The gap narrows as frequency rises, approaching a limit.
Regular saving
- Input
- £0 start, £200/month at 6% for 20 years
- Output
- £92,408
Contributions total £48,000; growth adds £44,408. Over long periods the growth approaches the amount contributed.
Why use it
What the Compound Interest Calculator gives you
One consistent convention
The lump sum and the contributions compound at the same frequency, so the total corresponds to a product that could actually exist.
Frequency made visible
Switching between yearly and daily compounding shows how much the convention is worth — often more than a small difference in the headline rate.
Real value after inflation
A projection in nominal terms flatters. The inflation-adjusted figure shows the purchasing power you would actually have.
Timing of contributions
Paying at the start of the period rather than the end earns an extra period of growth each time, which compounds into a visible difference.
Good to know
Compound Interest Calculator limitations
- Assumes a constant rate. Real returns vary year to year, and a sequence of poor early years produces a materially lower result than the average implies.
- Tax on interest or gains is not deducted; in a taxable account the effective rate is lower.
- Fees are excluded. A 1% annual charge on a 6% return removes roughly a sixth of the growth over long periods.
- Projections are arithmetic, not forecasts. They show what a given rate produces, not what any investment will return.
Summary
Compound Interest Calculator in short
- A = P(1 + r/n)^(nt) is the compound interest formula.
- £10,000 at 6% compounded monthly becomes £18,194 over 10 years.
- More frequent compounding raises the result for the same nominal rate.
- Contributions at the start of each period earn one extra period of growth.
- The inflation-adjusted figure is the one that reflects real purchasing power.
FAQ
Compound Interest Calculator questions
What is the compound interest formula?
A = P(1 + r/n)^(nt). P is the starting amount, r the annual rate as a decimal, n the number of compounding periods per year and t the years. Subtract P from A to get the interest alone.
How much better is compound than simple interest?
The gap widens with time. Over 10 years at 6%, £10,000 earns £6,000 simple but £8,194 compounded monthly. Over 30 years the same principal earns £18,000 simple and £50,226 compounded.
Does compounding frequency really matter?
Yes, though less than people assume. £10,000 at 6% for 10 years gives £17,908 compounded yearly and £18,221 daily — a 1.7% difference. The gain shrinks as frequency rises and converges on a ceiling.
Why do other calculators give a different total?
Many compound the opening balance at the frequency you chose but the monthly contributions monthly regardless, so the two halves grow under different assumptions. Using one frequency for both gives a figure that matches a real product.
Should contributions be at the start or end of the period?
It depends on the product. A salary-date standing order lands at the start and earns that period's growth; interest credited at period end does not. The difference is one period of interest, about 1% a year at 12%.
What is the rule of 72?
Divide 72 by the annual rate to estimate the years for money to double. At 6%, 72 ÷ 6 = 12 years. It is a mental shortcut accurate to within a few months for rates between about 4% and 12%.
Should I adjust for inflation?
For any projection beyond a few years, yes. £100,000 in 20 years at 3% inflation buys what £55,368 buys today. A nominal figure without that context systematically overstates the outcome.
Is tax included?
No. Interest and gains may be taxable depending on the account and where you live. In a taxable account, reduce the rate to an after-tax figure before projecting to keep the result realistic.
Are my savings figures uploaded?
No. The projection is arithmetic performed in your browser. Nothing about how much you have or contribute is sent anywhere, stored or logged.
Sources
- Standard compound interest formula
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