The most powerful force in personal finance — made visible. Enter any principal, rate and timeframe to see compound interest build, compare compounding frequencies and run multiple scenarios side by side.
| Frequency | Final Amount | Total Interest | vs Annual |
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| Year | Interest Earned | Balance | Multiplier |
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Compound interest is the engine of wealth creation. Albert Einstein allegedly called it the eighth wonder of the world. Whether he said it or not, the maths is undeniable: money earning interest on its interest grows exponentially, not linearly. This calculator makes that growth visible — and shows why the compounding frequency and starting early matter far more than most people realise.
A = P(1 + r/n)^(nt) — where A is the final amount, P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year and t is the time in years.
At 5% compounded monthly: £10,000 becomes £16,470 after 10 years and £27,126 after 20 years. The same rate compounded annually: £16,289 and £26,533. Monthly compounding adds £181 and £593 respectively — small differences that become meaningful at larger sums.
Divide 72 by the interest rate to get the approximate number of years to double your money. At 5%: 72/5 = 14.4 years. At 7%: 72/7 = 10.3 years. This mental shortcut is accurate to within 1% for rates between 2% and 20%.
Going from annual to monthly compounding adds a small boost — a few percent of the interest earned. But increasing the rate by 1% has a far larger effect. At £10,000 for 20 years: 5% monthly compounds to £27,126. 6% annually compounds to £32,071. Rate dominates frequency.
Simple interest is calculated only on the principal — £10,000 at 5% simple interest for 10 years earns £5,000. Compound interest earns interest on both the principal and previously earned interest. The same £10,000 at 5% compounded monthly earns £6,470 — 29% more. The difference grows dramatically over longer periods.
Over short periods, the difference between monthly and annual compounding is small. At 5% on £10,000: monthly compounding earns £181 more than annual over 10 years. Over 30 years the difference grows to £1,611. For savings accounts the frequency matters marginally — rate and time are far more impactful than whether interest compounds monthly or annually.
Yes — on debt. Credit card debt at 22.9% APR compounds monthly. Missing minimum payments means interest compounds on interest, and balances can spiral quickly. The same mathematical force that builds savings destroys finances when applied to high-interest debt. Always prioritise clearing high-interest debt before focusing on savings growth.