Compound Interest Calculator
See how your savings, ISA, pension, or investment pot could grow over time.
After 20 years, your estimated balance could be
£43,987.27
You contributed £25,000.00 yourself. The remaining £18,987.27 comes from estimated compound growth. This shows how regular contributions and time can work together to build long-term value.
Balance over time
Year-by-year breakdown
| Year | Contributions | Growth | Balance |
|---|---|---|---|
| 1 | £2,200.00 | £84.16 | £2,284.16 |
| 2 | £3,400.00 | £234.03 | £3,634.03 |
| 3 | £4,600.00 | £452.95 | £5,052.95 |
| 4 | £5,800.00 | £744.47 | £6,544.47 |
| 5 | £7,000.00 | £1,112.30 | £8,112.30 |
Formula
Compound interest is calculated as A = P(1 + r/n)nt,
where P is the initial amount, r is the annual rate as a decimal,
n is the number of compounding periods per year, and t is the number of years.
With regular monthly contributions, the calculation runs iteratively period-by-period to add each contribution and apply interest.
Worked example
Starting with £1,000.00, adding £100.00 per month at 5% annual return for 20 years with monthly compounding produces an estimated final balance of £43,987.27 (£25,000.00 contributed plus £18,987.27 in compound growth).
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Frequently asked questions
What is compound interest?▾
Compound interest is interest earned on both your initial deposit and on interest already added to the balance. Over long periods, it can grow your savings far faster than simple interest.
How is compound interest calculated?▾
The standard formula is A = P(1 + r/n)^(nt), where P is your initial amount, r is the annual rate, n is the number of times interest compounds per year, and t is the number of years. When you add regular monthly contributions, the calculation is done iteratively, period by period.
How often should interest compound?▾
More frequent compounding gives slightly higher returns. Monthly is common for savings accounts and investments. Daily compounding produces marginally more, annual produces marginally less. The differences are small for typical rates.
Does this calculator account for UK tax (ISA, dividend tax, capital gains)?▾
No. Results are pre-tax estimates. ISAs are tax-free up to the annual allowance, but other accounts may be subject to dividend tax, capital gains tax, or income tax depending on the type and your circumstances. Speak to a financial adviser for tax-specific guidance.
Can I include monthly contributions?▾
Yes. Enter your regular monthly contribution and the calculator will iteratively add it to your balance each month before applying interest. This reflects how most savings and investment accounts work in practice.
Are investment returns guaranteed?▾
No. Investment returns are not guaranteed and may go down as well as up. The rates you choose in this calculator are assumptions only — actual returns will vary depending on market conditions, fees, and the specific products you hold.