Compound Interest Calculator
Calculate compound interest growth over time. Enter principal, rate, frequency and years to see your final balance and total interest earned. Supports monthly, quarterly or annual compounding.
How to use
The Rule of 72
Divide 72 by your annual interest rate to find how many years it takes to double your money. At 7%, money doubles every ~10 years. At 10%, every ~7 years.
Compounding frequency
Monthly compounding gives slightly more than annual. On £10,000 at 7% over 20 years: annually gives £38,697; monthly gives £40,096 — about £1,400 extra, for free.
Albert Einstein reportedly called compound interest the 'eighth wonder of the world', though historians dispute whether he actually said it. What's not disputed: £1 invested in 1800 at 7% compound annual growth would be worth over £100 million today.
Frequently asked questions
How is compound interest different from simple interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all previously earned interest — so your interest earns interest. Over long periods, this difference becomes enormous: £10,000 at 7% simple interest for 30 years gives £31,000; at compound interest it grows to over £76,000.
How often should interest compound for the best return?
The more frequently interest compounds, the higher your final balance. Daily compounding gives marginally more than monthly, which gives more than annual. The difference between monthly and daily compounding is usually small — under 0.1% per year — but compounding annually versus monthly over decades can meaningfully reduce your returns.
What is the Rule of 72?
The Rule of 72 is a quick mental maths trick: divide 72 by your annual interest rate to estimate how many years it takes your money to double. At 6%, money doubles in 12 years (72 ÷ 6 = 12). At 9%, it doubles in 8 years. It's accurate to within about 1% for rates between 2% and 15%.