Finance
Calculate ending balance with compound interest and monthly contributions.
Ending Balance
$16,470after 10 years
Your total investment will grow through compound interest and monthly contributions. The interest compounds at your selected frequency, accelerating growth over time.
Compound interest is interest earned on your principal and on previously accumulated interest. Unlike simple interest (fixed returns), compound interest grows exponentially because each compounding period adds earned interest back to the base. A £10,000 investment at 5% compounded monthly grows to £16,453 in 10 years—£6,453 earned purely from the power of compounding. The more frequently interest compounds (daily vs. annually), the faster your money grows.
The calculator applies the compound interest formula A = P(1 + r/n)^(nt) where P is your principal, r is your annual rate as a decimal, n is the compounding frequency per year, and t is the number of years. If you add monthly contributions, the calculator also computes their future value using the annuity formula, then combines both to show your total ending balance. You can switch between annual, semi-annual, quarterly, monthly, or daily compounding to see how frequency affects growth.
A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]A is the final amount; P is the principal; r is the annual rate as a decimal; n is the compounding frequency (12 for monthly, 365 for daily); t is the time in years; PMT is the monthly contribution amount.
| Input | Result | Notes |
|---|---|---|
| Principal £10,000, Rate 5% p.a., Time 10 years, Compounded monthly, No contributions | Ending Balance: £16,453 | Total Interest: £6,453 | Shows the core power of compounding: your money grows by 65% in a decade, purely from reinvested interest. |
| Principal £5,000, Rate 4% p.a., Time 20 years, Compounded daily, £100 monthly contribution | Ending Balance: £56,892 | Total Contributions: £29,000 | Total Interest: £27,892 | Monthly contributions add £24,000 of your own money, but interest earns an additional £27,892—showing how small regular deposits compound into wealth. |
| Principal £50,000, Rate 6% p.a., Time 15 years, Compounded quarterly, £500 monthly contribution | Ending Balance: £211,840 | Total Contributions: £140,000 | Total Interest: £71,840 | Larger principal and regular deposits together create substantial growth: your £140k in contributions grows by £211k total, with interest contributing nearly 34% of the final amount. |
Simple interest is calculated only on the principal each year (e.g., £1,000 at 5% earns £50/year forever). Compound interest is calculated on the principal plus all previously earned interest, so earnings accelerate over time. A £1,000 investment at 5% compounded annually grows to £1,629 in 10 years (compound), but to only £1,500 under simple interest—a £129 difference that widens with time.
Yes, daily compounding always yields more, but the difference is often small at low rates and short periods. At 2% for 5 years, daily vs. annual differs by under £10 on £10,000. At 8% for 30 years, daily compounds to £101,051 vs. £100,627 for annual—a £424 difference. Use this calculator to see the real impact for your specific rate and term.
Use the rate your bank or investment provider offers. For context: UK savings accounts range 3–5%, bonds 4–6%, fixed deposits 4–7%, and equity funds historically average 7–10% (but with year-to-year volatility). Run multiple scenarios—conservative, realistic, and optimistic—to understand the range of outcomes.
Yes—compound interest works the same way but grows your debt. A £200,000 mortgage at 5% compounded monthly over 25 years costs about £373,000 total (£173,000 in interest). Use this calculator to see how making extra payments early can save tens of thousands in compound interest charges.
Calculate the nominal (before-inflation) final amount using this tool, then estimate inflation (typically 2–3% annually). Subtract the inflation rate from your interest rate to get the 'real' return—so a 5% nominal rate in a 3% inflation environment nets 2% real purchasing power growth. Over 30 years, inflation erodes the value of your money significantly.
Yes—small monthly amounts compound dramatically. £100/month at 5% for 20 years adds £24,000 of your own money, but compounds to £41,233 total (£17,233 earned). Over decades, regular contributions coupled with compounding create exponential wealth. Start early and make contributions consistent for maximum impact.