Compound Interest Calculator

Features

• Any compounding frequency from daily to annual
• Regular contributions at your chosen interval
• Inflation adjustment showing real purchasing power
• Year-by-year table of balance, contributions and growth
• CSV export of the full projection

How to use it

1. Enter your starting amount, expected return and time horizon.
2. Add a regular contribution if you save monthly.
3. Set an inflation rate to see the result in today's money.
4. Read the year-by-year table for the full picture.

Compounding, and the assumptions behind these numbers

Compound interest means returns earn returns. £10,000 at 7% earns £700 in year one, but £749 in year two because the £700 is now also invested. Over long periods this dominates: the same £10,000 left for 30 years at 7% becomes roughly £76,000, of which £66,000 is growth rather than principal. Time in the market matters far more than the amount, which is why starting a decade earlier typically beats contributing more later.

Compounding frequency matters much less than people expect. Moving from annual to daily compounding at 7% raises the effective annual rate only from 7% to about 7.25%. The contribution amount and the number of years dominate the outcome; frequency is a rounding detail by comparison.

The assumptions here deserve scepticism. A fixed annual return is a modelling convenience, not a description of how markets behave, real returns are volatile, and the order in which good and bad years arrive materially changes the outcome when you are contributing or withdrawing. This model also ignores fees, which compound against you exactly as returns compound for you, and ignores tax on gains. Treat the output as an illustration of the mechanism, not a forecast. It is not financial advice, and a qualified adviser is the right person to consult before making decisions.