Compound Interest Calculator
Calculate compound interest and see how your investments grow over time
Investment Details
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Investment Growth
Enter investment details
See how your money grows over time
Compound Interest Formula
Standard Compound Interest Formula:
A = P(1 + r/n)^(nt)
A = Final amount
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Number of times interest compounds per year
t = Time period in years
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Number of times interest compounds per year
t = Time period in years
Quick Examples
Conservative Investor
£10,000 initial + £200/month
4% annual return, 20 years
Result: ~£83,000
4% annual return, 20 years
Result: ~£83,000
Moderate Investor
£5,000 initial + £300/month
7% annual return, 15 years
Result: ~£95,000
7% annual return, 15 years
Result: ~£95,000
Aggressive Investor
£20,000 initial + £500/month
10% annual return, 25 years
Result: ~£885,000
10% annual return, 25 years
Result: ~£885,000
Retirement Planning
£1,000 initial + £400/month
6% annual return, 30 years
Result: ~£400,000
6% annual return, 30 years
Result: ~£400,000
Understanding Compound Interest
What is Compound Interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. It's often called "interest on interest" and can significantly accelerate wealth building over time.
The Power of Compounding
The longer your money stays invested, the more powerful compounding becomes. This is why starting early, even with small amounts, can lead to substantial wealth over time.
Compounding Frequency
- Daily: Interest calculated 365 times per year
- Monthly: Interest calculated 12 times per year
- Quarterly: Interest calculated 4 times per year
- Annually: Interest calculated once per year
Key Factors
- Time: The most important factor - start early
- Interest Rate: Higher rates mean faster growth
- Principal: Your initial investment amount
- Regular Contributions: Consistent investing accelerates growth
- Compounding Frequency: More frequent = slightly better returns
Investment Tips
- Start Early: Time is your greatest asset
- Be Consistent: Regular contributions compound effectively
- Stay Invested: Don't withdraw early if possible
- Reinvest Returns: Let your earnings compound
- Consider Inflation: Aim for real returns above inflation
Real-World Applications
- Retirement planning and pensions
- Education savings accounts
- Emergency fund growth
- Investment portfolio planning
- Mortgage vs investment decisions