See how savings grow with compound interest and regular deposits.
All projections run locally.
How does compound interest work?
Compound interest grows by A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the number of times interest compounds per year, and t the years. Unlike simple interest, each period earns interest on prior interest, so more frequent compounding and longer time horizons increase the final balance.
Understanding your result
The earlier and more frequently interest compounds, the larger the final balance. Regular deposits dramatically increase the long-term total.
Formula and method
Future value = P(1 + i)^N + D × [((1 + i)^N − 1) ÷ i], where i = rate ÷ frequency, N = frequency × years and D is the deposit per period. When i = 0 the deposits simply add up.
Assumptions and limitations
The projection assumes a constant return and ignores inflation, taxes and fees. Real returns fluctuate, so treat the result as an illustration rather than a guarantee.
Worked example
10,000 at 8% compounded monthly for 10 years (no deposits) grows to about 22,196 — more than 2,196 above simple interest.
How it compares
| Compounding frequency | Effect on final balance |
|---|---|
| Annually | Baseline |
| Monthly | Slightly higher |
| Daily | Marginally higher again |
How to use this tool
- Enter your initial amount.
- Add the annual rate, the number of years and how often it compounds.
- Optionally add a deposit per compounding period.
- Press Calculate.
Common mistakes to avoid
- Entering the deposit per year when the period is monthly.
- Forgetting that real returns vary and are not guaranteed.
About the Compound Interest Calculator
Compound interest earns interest on both your principal and the interest already added, accelerating growth over time. Add a regular deposit to model real saving.
Who should use this tool
Savers and investors who want to see how money grows over time, and anyone learning the power of compounding.
Benefits
- Visualise long-term growth from a one-off or regular investment.
- See how compounding frequency affects the final balance.
- Separate your contributions from the interest earned.
Practical use cases
- Projecting the growth of a savings account or deposit.
- Modelling regular contributions to an investment.
- Teaching the difference compounding makes over decades.
Frequently asked questions
Does more frequent compounding help?
Yes, slightly. More frequent compounding produces a marginally higher final balance for the same nominal rate.
Should I enter the annual rate or a periodic rate?
Enter the annual rate and choose how often it compounds; the calculator divides the rate by the frequency internally. So an 8% annual rate compounding monthly is applied as roughly 0.667% each month across the number of periods, rather than 8% every month.
How do regular deposits change the outcome?
Adding a deposit each period means new money is invested repeatedly, and each contribution then earns its own compounding return for the time it remains invested. Over long horizons the deposits often contribute more to the final balance than the starting principal alone.