Compound Interest Calculator

Free compound interest calculator. See how your investments grow over time with monthly contributions and compounding returns.

✓ Free to use ✓ Instant results ✓ Mobile friendly ✓ No sign-up needed

Initial Investment

Monthly Contribution

Annual Return (%)

Years

Future Value

Total Invested

Interest Earned

Total Return

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Understanding Compound Interest

Compound interest is often called the "eighth wonder of the world." Unlike simple interest, compound interest earns returns on your returns — meaning your money grows exponentially over time rather than linearly.

The Compound Interest Formula

Future Value = P(1 + r/n)^(nt) + PMT × [(1+r/n)^(nt) - 1] / (r/n), where P is principal, r is annual rate, n is compounding frequency, t is time, and PMT is regular contribution.

Why Start Investing Early?

Investing £10,000 at age 25 vs age 35 (7% return) results in nearly double the final amount.
Regular monthly contributions dramatically accelerate growth through dollar-cost averaging.
Time in market beats timing the market for long-term wealth building.

Frequently Asked Questions

What is a realistic annual return?+

Historically, broad market index funds have returned an average of 7-10% annually before inflation. A conservative estimate is 5-7%.

Does this account for inflation?+

No. To get a real return, subtract the inflation rate (typically 2-3%) from the annual return percentage you enter.

How often does compound interest compound?+

This calculator uses annual compounding. In practice, many investments compound monthly or daily, which results in slightly higher returns.