Last updated: October 2026
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Compound interest is interest on your starting amount plus interest already added, so growth speeds up over time. Enter a lump sum, monthly contributions, rate and term, and this calculator shows the projected final balance, everything you paid in, and how much is interest.
What does the compound interest calculator do?
Compound interest is interest earned on both your original deposit and the interest already added. This free calculator projects how savings or investments grow when you combine a starting lump sum with regular monthly contributions, showing the future balance, everything you put in, and how much of the total is interest.
The formula
Future value = P(1 + i)N + PMT x (((1 + i)N – 1) / i), where P is the initial deposit, i is the annual rate divided by the compounding periods per year, N is years times periods per year, and PMT is each period’s contribution. Monthly contributions are treated as end-of-month payments and scaled to the compounding frequency you choose.
Worked example
Start with £10,000, add £200 a month, earn 5% a year compounded monthly, for 10 years. The future value is £47,526.55. You contributed £34,000 in total, so £13,526.55 of the balance is interest earned on top of what you put in.
What is not included
This is a projection, not a promise. It assumes a constant rate, no withdrawals, and no fees, charges or tax on the interest. Real investments fluctuate, savings rates change, and tax rules differ by country and account type.
Frequently asked questions
How is compound interest different from simple interest?
Simple interest is paid only on the original amount. Compound interest is paid on the original amount plus all interest added so far, so growth accelerates over time. £10,000 at 5% simple interest for 10 years gives £15,000; compounded annually it gives £16,289.
Does compounding frequency matter much?
It helps, but less than the rate and the time. On £10,000 at 5% for one year, annual compounding gives £10,500 while daily compounding gives about £10,513. The rate and the number of years move the result far more.
What is the Rule of 72?
A quick estimate: divide 72 by the annual rate to get roughly how many years it takes money to double. At 6%, money doubles in about 12 years. It is an approximation, not a substitute for the full calculation.
Are monthly contributions added at the start or end of the month?
This calculator treats them as end-of-month payments, the standard assumption for savings plans. The difference versus start-of-month is one extra compounding period per contribution, which is small over long horizons.
Is this financial advice?
No. It is a maths tool for illustration. Investment returns vary and can be negative. Speak to a qualified financial adviser before making investment decisions.
References
Formula background: Cbonds compound interest glossary.
Related calculators: Business loan calculator, Break-even calculator, Freelance rate calculator.
Reviewed by
Arham Arshad, founder of LancerBill, checked this tool and its calculation method in October 2026.