Compound interest calculator

Starting amount, monthly contribution, annual rate, years. The table shows every year so you can see where the growth comes from: your deposits or the interest on interest.

How compound interest is calculated

Each period, interest is added to the balance, and the next period's interest is calculated on the new, larger balance. With monthly compounding at 7% a year, the balance is multiplied by (1 + 0.07/12) twelve times a year, and each monthly contribution starts compounding from the month it is deposited. The formula for a lump sum is A = P(1 + r/n)^(nt); contributions are added as an annuity on top.

What the table tells you

• In the early years, most of the balance is your own deposits. Interest overtakes deposits somewhere between year 12 and year 20 at typical rates, which is why starting early matters more than the rate.
• Doubling the rate from 4% to 8% roughly triples the interest earned over 25 years, because the effect compounds.
• Fees work the same way in reverse: a 1% annual fee on a 7% return removes about a fifth of the final balance over 30 years.

Writing a business plan?

The financial plan section uses the same compounding logic for loan repayment and growth projections. See the template or have one written from your numbers.