Compound Interest Calculator
See how a balance grows over time with compounding interest, year by year.
How compound interest is calculated
This calculator applies the standard compound interest formula, A = P(1 + r/n)^(nt), where P is your principal, r is the nominal annual rate, n is how many times per year interest compounds, and t is the number of years. It returns the final balance, the total interest earned on top of your principal, the effective annual rate once compounding is accounted for, and a year-by-year schedule showing the balance, interest earned and contributions made in each year of growth. If you add a regular contribution, it's added to the balance at the start of every compounding period — before that period's interest — so your contributions compound too, not just the original principal.
The default inputs above — £10,000 at 5% for 10 years, monthly compounding — grow to roughly £16,470, meaning about £6,470 of the final balance is interest rather than contributed principal, and a rough Rule-of-72 check (72 ÷ 5 ≈ 14.4 years to double) confirms the balance is well on its way to doubling by year 14. To see what that growth is worth once rising prices are accounted for, use the Inflation-Adjusted Return calculator, and to work backward from a target retirement pot to the contribution needed to reach it, see the Retirement Savings calculator.
Frequently asked questions
- What is compound interest?
- Interest calculated on both the original principal and the interest already earned in prior periods, so growth accelerates over time instead of staying flat.
- What does compounding frequency change?
- The more often interest is added to the balance, the sooner it starts earning its own interest. Daily compounding grows slightly faster than annual compounding at the same nominal rate.
- What's the difference between the nominal rate and the effective annual rate?
- The nominal rate is the rate you enter. The effective annual rate (EAR) is what you actually earn over a year once compounding is accounted for — it's always equal to or higher than the nominal rate.
- Why does the schedule show interest earned per year instead of per period?
- The schedule reports one row per calendar year for readability, even if interest compounds more often than that — the interest shown is the total earned across all periods within that year.
- How do regular contributions work?
- If you enter a regular contribution, that amount is added to the balance at the start of every compounding period — matching your compounding frequency — before that period's interest is applied, so contributions start earning interest immediately.
- Can I use this in my own app?
- Yes — every calculator on Stupidly Clever has a matching REST API and MCP tool that runs the same underlying logic.
- What is the Rule of 72?
- A quick mental shortcut: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6% annual interest, 72 ÷ 6 = 12 years to double. It's an approximation, but accurate enough for quick comparisons.