Compound Interest Calculator: How It Works
Einstein supposedly called compound interest the eighth wonder of the world. The wonder isn't the maths. It's what 30 years of nothing does to £10,000.
£10,000 invested at 7%, no further contributions
Time, not income, does the work. Held inside an ISA, the growth is tax-free.
Key takeaways
Compound interest is interest earned on both your original investment and the interest that has already been added.
Compound interest allows your returns to generate their own returns, leading to accelerated growth over time.
To use the compound interest calculator, enter your initial investment, monthly contributions, expected interest rate, time period, and compounding frequency.
The longer you invest and the more frequently interest compounds, the faster your money grows.