Compound Interest Calculator

See how your savings and investments grow over time with the power of compound interest.

Investment Details
£
£
%
Understanding Compound Interest
What is Compound Interest?

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (calculated only on the principal), compound interest allows your money to grow exponentially over time.

The 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 in years
The Rule of 72

A quick way to estimate how long it takes to double your money: divide 72 by the interest rate. For example, at 6% interest, your money doubles in approximately 72 ÷ 6 = 12 years.

Tips for Maximising Compound Interest
  • Start early: Time is your greatest ally with compound interest
  • Contribute regularly: Even small monthly contributions add up significantly
  • Reinvest dividends: Let your earnings compound
  • Consider ISAs: Tax-free growth maximises your returns
Quick Examples
Current UK Rates (2025)

Easy Access Savings: 3.5% - 5%

Fixed Rate Bonds: 4% - 5.5%

Cash ISAs: 4% - 5%

S&P 500 Historical Avg: ~10%

Rates are approximate and subject to change.

Related Tools