Compound interest calculator with a year-by-year table
Put in a starting balance, an interest rate, a term and how often interest is added, and see what the pot becomes. Add a monthly contribution and the calculator splits the final figure into what you paid in and what the interest earned, year by year. The standard compound-interest and annuity formulas are shown with your numbers in them.
How to use the Compound Interest Calculator
- Enter the starting amount, the annual rate and the number of years.
- Choose how often interest is compounded.
- Add a monthly contribution, or leave it at zero for a lump sum only.
- Press Calculate growth to see the year-by-year table and the totals.
The two formulas
For a lump sum left alone, the balance after t years is:
A = P × (1 + r/n)n·t
where r is the annual rate as a decimal and n is the number of compounding periods a year. £10,000 at 5% compounded monthly for 10 years gives 10,000 × (1 + 0.05/12)120 = £16,470.09.
Regular contributions are an annuity, and their future value is:
FV = PMT × ((1 + i)N − 1) ÷ i
with i the rate for one contribution period and N the number of contributions. £200 a month for 120 months at the same rate adds £31,056.46, so the pot reaches £47,526.55 — of which £34,000 is money you put in and £13,526.55 is interest.
How compounding frequency is handled
Contributions are monthly but interest may be added yearly, quarterly or daily. The calculator converts your rate into the equivalent monthly rate, i = (1 + r/n)n/12 − 1, so the two can be combined without distorting the result: with no contributions the year-end figures match A = P(1 + r/n)nt exactly. Compounding more often helps, but far less than people expect — at 5%, yearly compounding turns £10,000 into £16,288.95 over a decade and daily compounding into £16,486.65, a difference of under £200.
Nominal rate, AER and inflation
A quoted "5% compounded monthly" is a nominal rate; the effective annual rate is (1 + 0.05/12)12 − 1 = 5.116%. UK savings accounts are advertised as AER, which is already the effective annual rate, so if you enter an AER choose yearly compounding to avoid counting the effect twice. Note too that these are nominal amounts: at 3% inflation, £47,527 in ten years' time buys what about £35,400 buys today.
Reading the table
| Column | Meaning |
|---|---|
| Opening | Balance at the start of that year |
| Paid in | Contributions made during the year |
| Interest | Interest credited during the year |
| Closing | Balance at the end of the year |
The interest column grows every year even though the contribution stays flat — that is compounding doing the work. Nothing here accounts for tax on interest, platform fees or a variable rate, and it assumes every contribution is made on time.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt) for a lump sum. Regular deposits are added with the annuity formula FV = PMT × ((1 + i)^N − 1) ÷ i.
Does compounding daily beat compounding monthly?
Slightly. At 5% over ten years on £10,000 the difference between monthly and daily compounding is under £20. The rate and the term matter far more than the frequency.
Should I enter an AER or a nominal rate?
If your account quotes AER, choose yearly compounding — the AER already includes the compounding effect. Use monthly or daily only when the provider quotes a nominal rate with that frequency.
Is tax taken into account?
No. The figures are before any tax on interest or dividends, platform charges and inflation. Deduct your own.
Privacy
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Last updated 2026-09-23.