Compound Interest Calculator
Calculate how an initial amount plus regular contributions grows with compound interest, and see a simple visual of that growth.
% per year
years
Estimated final balance
£25,567
- Total paid in
- £17,000
- Interest / growth
- £8,567
Projected growth
What is compound interest?
Compound interest is interest earned on both your original money and the interest it has already earned. Over time this creates a snowball effect: the longer your money compounds, the faster it grows. Albert Einstein is often said to have called it the most powerful force in finance, whether or not he did, the maths is compelling.
How often interest is added (the compounding frequency) affects the result. More frequent compounding, monthly or daily rather than annually, produces a slightly higher balance at the same headline rate.
Why time is your biggest advantage
The earlier you start, the more powerful compounding becomes, because your money has more years to grow on itself. This is why starting to save or invest in your twenties can outperform saving larger amounts later.
Use the growth chart to see how the balance accelerates over time, and try adjusting the contribution and time period to see the effect.
Worked example
£5,000 invested with £100 added monthly at 6% compounded monthly grows to about £21,900 after 10 years. You would have contributed £17,000, with roughly £4,900 coming from compound growth.
Extend that to 25 years and the balance reaches around £75,700, of which about £43,700 is growth, a striking illustration of the power of time.
Please note: This is an illustration using a fixed rate and does not account for inflation, fees or investment risk. It is not financial advice.
Frequently asked questions
What compounding frequency should I choose?
Match it to your account or investment. Savings often compound monthly; some investments quote annual growth. The difference is small but real.
Does this include inflation?
No. The figures are in today’s pounds without adjusting for inflation, which reduces the real spending power of future money.
Is investment growth guaranteed?
No. Investment returns vary and can be negative. A fixed rate is only a simplified illustration, not a promise.
Can I model a lump sum with no contributions?
Yes. Set the monthly contribution to zero to see how a single lump sum grows on its own.
What rate is realistic?
Cash savings currently pay low single-digit rates; long-term stock market returns have historically been higher but with more risk. Use a rate that matches your product.
Figures last reviewed on 13 August 2025.
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