Compound Interest Calculator
See what a lump sum grows to over time, and how much of the final figure is interest rather than the money you put in.
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How it works
Compound interest pays interest on the interest already earned, not just on your original deposit. That is what makes the growth curve bend upwards instead of running in a straight line.
How often interest is added matters. The same annual rate compounded monthly produces slightly more than compounded yearly, because each addition starts earning immediately.
A = P × (1 + r ÷ n)^(n × t)
- A — the future value — what you end up with
- P — the principal — your starting amount
- r — the annual interest rate as a decimal (5% = 0.05)
- n — the number of times interest compounds per year
- t — the term in years
Worked example
1,000 invested at 5% compounded monthly for 10 years
Inputs
Results
Compounded once a year instead of monthly, the same deposit reaches only 1,628.89 — the frequency is worth 18 on this example.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus all interest already added, so growth accelerates over time.
Does compounding frequency make much difference?
Less than most people expect at ordinary rates. In the example above, monthly rather than annual compounding adds about 1% to the ten-year result. It matters far more at high rates or over very long terms.
Can I include regular monthly contributions?
Not in this calculator — it models a single lump sum. A dedicated SIP and savings calculator that handles recurring deposits is on our roadmap.
Does this account for inflation or tax?
No. The result is a nominal figure. To think in today’s money, subtract your expected inflation rate from the interest rate before entering it.
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