Calculate how your investments grow with compound interest over time. Includes monthly contributions and year-by-year breakdown.
What Is Compound Interest Calculator?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the original amount, compound interest grows exponentially — your interest earns interest, which earns more interest. Albert Einstein reportedly called it the eighth wonder of the world.
The impact of compounding becomes dramatic over long periods. £10,000 invested at 7% annual compound interest grows to roughly £20,000 in 10 years, £40,000 in 20 years and £76,000 in 30 years. This tool visualises the growth curve and lets you experiment with different rates, time periods and contribution schedules to see how compounding affects your savings or investments.
How to Use This Tool
Enter your initial investment amount (principal).
Set the annual interest rate as a percentage.
Choose the investment period in years.
Select the compounding frequency (monthly, quarterly, annually).
View the final amount, total interest earned and the year-by-year growth breakdown.
Tips & Best Practices
More frequent compounding (monthly vs annually) produces slightly higher returns — the difference matters over long periods.
Regular additional contributions dramatically accelerate growth — even small monthly additions compound significantly over decades.
Use the "Rule of 72" for quick estimates: divide 72 by the interest rate to estimate how many years it takes to double your money.
Real returns should account for inflation — a 7% return with 3% inflation gives roughly 4% real growth.
Common Use Cases
Planning long-term savings by visualising how investments grow over time.
Comparing savings accounts or investment products with different interest rates.
Understanding how early investing provides an advantage through longer compounding periods.
Calculating the true cost of debt where interest compounds against you.
Frequently Asked Questions
What is compound interest?
Compound interest is interest earned on both the initial principal and accumulated interest. It makes your money grow exponentially over time.