Simulate how your investment grows over time. Configurable compounding frequency with a detailed year-by-year and month-by-month breakdown.
| Year | Total invested | Cumulative gains | Total capital |
|---|
Compound interest is the process by which the interest earned on an investment generates further interest in subsequent periods — interest on interest. Over time, this effect grows exponentially and is one of the most powerful forces in personal finance.
Example: you invest £10,000 at 7% per year for 30 years. With simple interest you earn a fixed £700 per year — total of £31,000. With compound interest, earnings accumulate and the result is £76,122. The £45,000 difference is pure mathematics.
There is a mental shortcut to estimate how many years it takes to double your capital: divide 72 by the annual return rate. At 7% per year: 72 ÷ 7 ≈ 10 years to double. At 10%: ~7 years. It is an approximation, but a surprisingly accurate one.
With a contribution of £200/month at a 7% annual return, the effect of time is dramatic:
| Period | Total invested | Final capital |
|---|---|---|
| 20 years | £48,000 | £104,000 |
| 30 years | £72,000 | £243,000 |
| 40 years | £96,000 | £528,000 |
The last 10 years are worth more than the first 20. Every year of delay costs far more than it seems.
The more frequent the compounding, the higher the final amount — but the difference between monthly and daily compounding is small in practice. For ETFs and investment funds, compounding is typically implicit in the unit price. This calculator lets you compare all frequencies to understand the real impact.
How to build a long-term investment plan, the simplest ETFs to start with, and how to manage a portfolio without losing sleep.
See the book →