Calculators
Compound interest calculator
See how a starting deposit and regular contributions grow once interest starts earning interest.
Your balance after 20 years
$300,850.72
Total deposits
$130,000.00
Total interest earned
$170,850.72
Year-by-year breakdown
| Year | Deposits | Interest | Balance |
|---|---|---|---|
| 0 | $10,000.00 | $0.00 | $10,000.00 |
| 1 | $16,000.00 | $919.19 | $16,919.19 |
| 2 | $22,000.00 | $2,338.58 | $24,338.58 |
| 3 | $28,000.00 | $4,294.31 | $32,294.31 |
| 4 | $34,000.00 | $6,825.16 | $40,825.16 |
| 5 | $40,000.00 | $9,972.70 | $49,972.70 |
| 6 | $46,000.00 | $13,781.53 | $59,781.53 |
| 7 | $52,000.00 | $18,299.43 | $70,299.43 |
| 8 | $58,000.00 | $23,577.68 | $81,577.68 |
| 9 | $64,000.00 | $29,671.22 | $93,671.22 |
| 10 | $70,000.00 | $36,639.02 | $106,639.02 |
| 11 | $76,000.00 | $44,544.25 | $120,544.25 |
| 12 | $82,000.00 | $53,454.70 | $135,454.70 |
| 13 | $88,000.00 | $63,443.02 | $151,443.02 |
| 14 | $94,000.00 | $74,587.14 | $168,587.14 |
| 15 | $100,000.00 | $86,970.62 | $186,970.62 |
| 16 | $106,000.00 | $100,683.03 | $206,683.03 |
| 17 | $112,000.00 | $115,820.45 | $227,820.45 |
| 18 | $118,000.00 | $132,485.91 | $250,485.91 |
| 19 | $124,000.00 | $150,789.85 | $274,789.85 |
| 20 | $130,000.00 | $170,850.72 | $300,850.72 |
What is compound interest?
Compound interest is interest earned on both your original deposit and on the interest you have already earned. Because each period’s interest is added to the balance before the next period is calculated, your money grows on an accelerating curve rather than in a straight line. Simple interest, by contrast, only ever pays on your original deposit, which is why the gap between the two widens dramatically over long time frames.
How is compound interest calculated?
The standard formula is A = P(1 + r/n)^(nt), where P is your starting balance, r is the annual interest rate as a decimal, n is the number of times interest compounds each year, and t is the number of years. Regular deposits are added on top of this and each one compounds for however long it remains invested. This calculator runs the projection day by day, so contributions and compounding stay in step even when you choose different frequencies for each.
How much difference does compounding frequency make?
More frequent compounding produces a slightly higher balance because interest starts earning interest sooner. Moving from annual to monthly compounding on a 7% return adds roughly 0.23% to your effective annual rate. It is a real but modest effect: the size of your regular contributions and the number of years you stay invested matter far more than whether interest is credited monthly or daily.
Why do regular contributions matter so much?
Every extra dollar you add buys more time in the market, and time is the most powerful input in the formula. A modest monthly deposit sustained over decades routinely contributes more to the final balance than a much larger one-off starting amount. Increasing your contribution early in the term has a far greater effect than increasing it later, because those early dollars have the longest runway to compound.
What interest rate should I use?
Use a rate that reflects the product you are actually considering. Australian high-interest savings accounts and term deposits are typically in the low-to-mid single digits, while long-run diversified share market returns have historically been higher but come with volatility and no guarantee. If you are projecting an investment return rather than a fixed savings rate, it is worth running a conservative figure alongside an optimistic one to see the range of outcomes.
Does this calculator account for tax and inflation?
No. The projection shows nominal returns before tax, fees and inflation. In practice, interest earned on savings is assessable income and is taxed at your marginal rate, and inflation reduces what your final balance will actually buy. Treat the result as a gross projection rather than a spending figure, and remember that a rate below inflation means your purchasing power is going backwards even as the balance rises.
One conversation, no pressure.
Tell us what you are planning. We will map out your options and explain what they mean for you.
Talk to us