Plot No. 8 · Money & Finance
Compound Interest Calculator
See how a lump sum grows when interest compounds. The calculator uses A = P(1 + r/n)^(nt): P is the starting amount, r the annual rate, n the compounds per year and t the years. At the defaults, 10,000 at 5% compounded monthly for 10 years grows to about 16,470, of which 6,470 is interest.
Uses the standard compound interest formula A = P(1 + r/n)^(nt). This assumes a fixed rate and no further deposits or withdrawals.
The link saves your inputs so you can bookmark or share this exact result.
The compound interest formula, worked through
Take the default deposit: £10,000 at 5% a year, compounded 12 times a year for 10 years. The rate per period is r / n = 0.05 / 12 = 0.004167, and there are n x t = 120 periods. Each period multiplies the balance by 1.004167, so over 120 periods the growth factor is 1.004167^120 = 1.64701.
The future balance is £10,000 x 1.64701 = £16,470.09, and the interest earned is £6,470.09. Monthly compounding at 5% works out the same as 5.116% paid once a year, which is the AER (annual equivalent rate) UK savings accounts quote so that accounts with different compounding can be compared directly.
What £10,000 grows to at different rates
Future balance of a one-off £10,000 deposit, compounded monthly, with nothing added or withdrawn. Read across for time and down for rate.
| Rate | 5 years | 10 years | 15 years | 20 years | 25 years | 30 years |
|---|---|---|---|---|---|---|
| 2% | £11,051 | £12,212 | £13,495 | £14,913 | £16,480 | £18,212 |
| 3% | £11,616 | £13,494 | £15,674 | £18,208 | £21,150 | £24,568 |
| 4% | £12,210 | £14,908 | £18,203 | £22,226 | £27,138 | £33,135 |
| 5% | £12,834 | £16,470 | £21,137 | £27,126 | £34,813 | £44,677 |
| 6% | £13,489 | £18,194 | £24,541 | £33,102 | £44,650 | £60,226 |
| 8% | £14,898 | £22,196 | £33,069 | £49,268 | £73,402 | £109,357 |
| 10% | £16,453 | £27,070 | £44,539 | £73,281 | £120,569 | £198,374 |
The bottom-right corner is the point of the table: at 10% for 30 years the deposit grows to £198,374, while 2% over the same 30 years only reaches £18,212. These are nominal figures. To see what a future sum is worth in today's money, run it through the inflation calculator.
Simple vs compound interest on the same deposit
£10,000 at 5% a year. Simple interest pays £500 every year on the original deposit only. Compound interest, added monthly, also pays on the interest already earned, so the gap widens every year.
| Years | Simple interest | Compound (monthly) | Extra from compounding |
|---|---|---|---|
| 1 | £10,500 | £10,512 | £12 |
| 5 | £12,500 | £12,834 | £334 |
| 10 | £15,000 | £16,470 | £1,470 |
| 20 | £20,000 | £27,126 | £7,126 |
| 30 | £25,000 | £44,677 | £19,677 |
| 40 | £30,000 | £73,584 | £43,584 |
The rate you need to reach a target
Working the formula backwards: r = n((A/P)^(1/(nt)) - 1). Each cell is the annual rate, compounded monthly, that grows a deposit to that multiple of itself in that many years. It works for any starting amount, so £10,000 to £20,000 is the 2x row.
| Grow to | 5 years | 10 years | 15 years | 20 years | 30 years |
|---|---|---|---|---|---|
| 1.5x (£15,000) | 8.14% | 4.06% | 2.71% | 2.03% | 1.35% |
| 2x (£20,000) | 13.94% | 6.95% | 4.63% | 3.47% | 2.31% |
| 3x (£30,000) | 22.17% | 11.04% | 7.35% | 5.51% | 3.67% |
| 5x (£50,000) | 32.62% | 16.20% | 10.78% | 8.07% | 5.38% |
The 2x row is the exact version of the Rule of 72, which the Rule of 72 guide explains as a mental shortcut. If you are adding money every month rather than leaving one deposit alone, the savings goal calculator works out how long a target takes from a balance plus monthly deposits.
How compound interest is calculated
Compound interest is interest earned on your interest as well as on your original deposit. This calculator uses the standard formula A equals P times one plus r over n, all raised to the power of n times t, where P is your starting amount, r is the annual rate as a decimal, n is how many times interest compounds each year and t is the number of years.
Because each compounding period adds interest to the balance that the next period then earns on, growth accelerates over time. The longer the horizon, the more the final balance is made up of interest rather than your original deposit.
How to use the compound interest calculator
- Enter your starting amount.
- Set the annual interest rate and the number of years to leave it invested.
- Choose how many times a year interest compounds, then read the future balance and the interest earned.
Worked examples
10,000 at 5 percent for 10 years, compounded monthly
Inputs: Starting amount 10,000, rate 5 percent, 10 years, 12 compounds per year.
Result: A future balance of about 16,470, of which roughly 6,470 is interest.
The same deposit compounded annually
Inputs: 10,000 at 5 percent for 10 years, 1 compound per year.
Result: A future balance of about 16,289, around 181 less than monthly compounding, showing how frequency helps a little but the rate matters far more.
Limitations and common mistakes
Edge cases and limitations
- It models a single lump sum left untouched. It does not add regular deposits, so a real savings plan with monthly contributions will end higher.
- The rate is fixed for the whole period. Variable rates and tax on the interest are not modelled.
- The future balance is rounded to whole pounds, so it may differ by a small amount from a bank statement.
Common mistakes
- Entering the rate as a decimal such as 0.05 instead of 5. The field expects the percentage figure.
- Expecting the result to include monthly saving. For a recurring contribution plan, a savings goal calculator is the right tool.
Frequently asked questions
What is the compound interest formula?
The future value is A = P(1 + r/n) raised to the power of n times t, where P is the starting amount, r is the annual rate as a decimal, n is how many times interest compounds per year, and t is the number of years.
Why does compounding frequency matter?
The more often interest is added, the more often you earn interest on interest. £10,000 at 5% for 10 years grows to £16,470 compounded monthly against £16,289 compounded once a year, a gap of £181. The rate and the time matter far more.
Does this account for regular deposits?
No. This calculator models a single lump sum left to grow. If you plan to add money regularly, your final balance will be higher than the figure shown here. The Investor.gov alternative guide below has a table for a starting sum plus a fixed monthly deposit.
How much will £10,000 be worth in 10 years at 5%?
About £16,470 if interest compounds monthly, or £16,289 if it compounds once a year. With simple interest, paid only on the original deposit, it would be £15,000.
What interest rate do I need to double my money in 10 years?
6.95% a year compounded monthly, from r = n((A/P)^(1/(nt)) - 1) with A/P = 2. The Rule of 72 gives 7.2%, which is close enough for mental maths but slightly high.
What is the difference between simple and compound interest?
Simple interest is paid on the original deposit only, so it grows in a straight line. Compound interest is also paid on interest already earned. Over 10 years at 5% the gap on £10,000 is £1,470; over 40 years it is £43,584.
Related calculators
UK Salary Take-Home Calculator
Estimate your monthly take-home from a UK gross salary using simplified 2026/27 tax bands.
Mortgage Repayment Calculator
See your monthly mortgage payment and total interest over the life of the loan.
FIRE Retirement Calculator
Find out when you can retire based on savings, monthly investing and target spend.
Loan Amortization Calculator
Year-by-year breakdown of principal and interest for any fixed-rate loan.
See all money & finance calculators.
Related guides
How Compound Interest Works
A plain-English guide to compound interest: the formula, why compounding frequency matters and how to use it to grow savings over time.
Free Investor.gov compound interest calculator alternative
See how savings grow with compound interest over time, with the formula and a worked example. Free guide and calculator.
Free alternative to Empower retirement planner
Project when you could retire from your savings, monthly investing and target spend. Free retirement planning guide and calculator.