Interest on interest, simple interest, and savings growth with a monthly top-up. Three calculators showing how money grows over time.
With compound interest the interest is added to the balance and starts earning in its own right in the next period. That is why £10,000 at 5% a year becomes £16,288.95 after ten years rather than the £15,000 simple interest would give.
The more often interest is added, the larger the final balance at the same nominal rate. Monthly compounding beats annual compounding, and the calculator lets you set the number of compounds per year to compare the two.
Simple interest is charged on the original amount only, so growth is linear. Compound interest grows exponentially, and the gap between the two widens with every additional year.
Use K = P · (1 + r/n)^(n·t), where P is the balance, r the rate, n the number of compounds per year and t the number of years. The calculator substitutes your numbers and shows each step.
Simple interest is calculated on the starting amount only. Compound interest adds the interest to the balance, so later periods earn more.
Interest is added twelve times a year. At the same nominal rate that produces a higher result than compounding once a year.
No — it shows the gross figure, before any tax on investment income. That is the version used in school and exam questions.
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