Compound Interest Calculator
Project the growth of a lump sum with regular contributions, showing total interest earned and a year-by-year balance breakdown.
- Category
- Calculators
- Updated
- Cost
- Free · no sign-up
Final balance
$109,421
After 20 years of compounding.
Figures are nominal — they don't adjust for inflation or tax on gains.
Year-by-year growth
| Year | Contributed | Interest | Balance |
|---|---|---|---|
| 1 | $7,400 | $388 | $7,788 |
| 2 | $9,800 | $948 | $10,748 |
| 3 | $12,200 | $1,690 | $13,890 |
| 4 | $14,600 | $2,626 | $17,226 |
| 5 | $17,000 | $3,768 | $20,768 |
| 6 | $19,400 | $5,128 | $24,528 |
Interest earning interest
Simple interest pays only on the original amount. Compound interest pays on the balance, so each period's interest joins the principal and starts earning too. Over short periods the difference is small. Over decades it dominates everything else.
A = P × (1 + r/n)^(n×t)
where P is the starting amount, r the annual rate, n the compounding
periods per year and t the number of years.
Contributions usually matter more than the rate
Chasing an extra half a percent of return is a popular hobby. Adding to the balance every month is more effective, especially early on:
| Scenario | 20-year balance |
|---|---|
| 5,000 at 6%, no contributions | ~16,000 |
| 5,000 at 6%, 200/month | ~108,000 |
| 5,000 at 7%, no contributions | ~19,300 |
An extra percentage point adds a few thousand. A regular contribution adds ninety.
Compounding frequency
More frequent compounding produces slightly more, because interest starts earning sooner. The gap narrows quickly: at 6%, annual compounding yields 6.00% effective, monthly gives 6.17%, daily gives 6.18%. Real and worth knowing, but far less important than the rate or the contribution.
Inflation and tax
The projection here is nominal. Two adjustments make it realistic:
- Inflation erodes purchasing power. Subtract expected inflation from the return for a rough real-terms figure — 6% nominal at 2.5% inflation is about 3.5% real.
- Tax applies to gains in most jurisdictions, unless the money sits in a sheltered account.
Neither is modelled here, so treat the final balance as an optimistic ceiling.
How to use the Compound Interest Calculator
Three steps, no sign-up.
Set your starting balance and rate
Use the annual rate — the calculator handles the compounding.
Add regular contributions
Monthly deposits are usually what drives the outcome more than the rate.
Read the yearly breakdown
The table separates what you put in from what the interest added.
Worked examples
£5,000 start, £200 a month, 6% for 20 years
- Inputs
- 5,000 · 200/mo · 6% · 20 years
- Result
- About 108,000 — of which roughly 55,000 is interest