A compound interest and savings-goal calculator that projects the future value of your savings or investments — including regular monthly deposits, your choice of compounding frequency, and an optional inflation adjustment. Useful for planning an ISA, a pension top-up, an emergency fund or any long-term savings goal.
How it works
The tool compounds period by period. Your annual rate r is divided by the compounding frequency n (yearly = 1, quarterly = 4, monthly = 12, daily = 365) to get a per-period rate. Each period it applies:
balance = balance × (1 + r⁄n) + contribution per period
where the per-period contribution is your monthly amount × 12 ÷ n. After (years × n) periods it reports the future value, the total you contributed (starting amount plus all deposits) and the interest earned (the difference). If inflation is on, it divides the future value by (1 + inflation)^years to show the result in today’s money.
Example
Start with £1,000, add £100/month, at 5% compounded monthly for 10 years:
- Future value: about £17,200
- Total contributed: £13,000 (£1,000 + £12,000 of deposits)
- Interest earned: about £4,200
Turn on 2.5% inflation and that £17,200 is worth roughly £13,400 in today’s purchasing power.
| Monthly deposit | Rate | Years | Future value |
|---|---|---|---|
| £100 | 5% | 10 | £17,200 |
| £200 | 5% | 10 | £32,000 |
| £100 | 7% | 20 | £53,300 |
| £250 | 6% | 30 | £253,000 |
Why time matters more than rate
The table above illustrates a fundamental truth about compounding: time has more leverage than the interest rate. Increasing the rate from 5% to 7% on £100/month over 20 years adds roughly £18,000 to the outcome. Extending the term from 20 to 30 years at the same 7% rate adds roughly £120,000 more. Starting earlier compounds not just the money but the compounding itself.
This is also why missing early years is costly. The same £100/month invested from age 25 to 65 (40 years at 6%) produces dramatically more than the same amount invested from 35 to 65 (30 years at 6%) — not because of the extra 10 years of contributions, but because of those 10 additional years of growth on every pound that was already there.
Compounding frequency: how much does it matter?
At the same annual rate, daily compounding beats monthly, which beats yearly — but the practical difference is smaller than most people expect. For example, at 5% for 20 years with no contributions, monthly compounding yields about 0.2% more than annual. The frequency choice matters most at high rates over long periods; for typical savings accounts and ISAs, it is a second-order factor compared to the rate and the deposit amount.
Understanding the inflation toggle
The inflation adjustment does not change what the account actually contains. It shows you what that future balance would be worth in today’s purchasing power. If the account shows £53,300 after 20 years and inflation has averaged 2.5% per year, the real purchasing power of that sum is closer to what £32,000 can buy today. This is important for retirement and long-term goal planning, where you care about what you can actually afford, not just the nominal number.
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