Compound interest calculator
Work out what a balance grows to over the years when interest is added to the amount and starts earning in its own right. Any compounding frequency is supported.
A balance of 10000.00 at 5% a year becomes 16288.95 after 10 years, of which 6288.95 is interest.
Formula
P is the starting balance, r the annual rate, n the number of compounds per year and t the number of years.
How we got there
The more often interest compounds, the higher the result at the same nominal rate. The calculator also shows the interest alone, over and above the starting balance.
How to work out compound interest by hand
- Turn the rate into a decimal
5% = 0.05. If interest compounds more often than yearly, divide it by the number of compounds too.
- Add one and raise to the power
1 + 0.05 = 1.05, then 1.05¹⁰ = 1.6289 over ten years.
- Multiply by the starting balance
10,000 × 1.6289 = £16,288.95. That is the final balance.
- Subtract the balance to see the interest alone
16,288.95 − 10,000 = £6,288.95. Simple interest would have given only £5,000.
Financial maths before the exam? a lesson with a Mathema tutor
Frequently asked questions
Use K = P · (1 + r/n)^(n·t). For £10,000 at 5% over ten years: 10,000 × 1.05¹⁰ = £16,288.95.
Simple interest is charged on the starting amount only. Compound interest adds it to the balance, so later years earn more.
The number of times interest is added per year: 1 for annually, 4 for quarterly, 12 for monthly.
No, it shows the gross figure. That is the version used in school and exam questions.
Unlock the Mathema lesson library
Leave your email and phone — we will take you through to the Mathema platform and open up the preparation library: problem sets, quizzes and lesson plans written by teachers.
Financial maths in the exam?
Book a free introductory lesson with a Mathema tutor. 30 minutes online, no commitment — we find the gap and the plan to close it.