Compound Growth Calculator
Compound growth applies to money, investments, population, revenue, or any quantity that grows by a percentage of itself each period. Enter a starting value and growth rate to see how the value compounds year over year.
Calculate compound growth
Can be money (£), population, units — any quantity.
Related: CAGR · Compound Interest · Investment Return
How the Compound Growth Calculator works
Compound growth is the process by which a quantity grows not just on its original value but on the accumulated total including all previous growth. The formula is Final Value = Starting Value × (1 + rate)^n. This calculator applies that formula year by year, showing you both the final value and a full year-by-year breakdown so you can see exactly how growth accelerates over time.
For UK investors, compound growth is the fundamental engine behind long-term pension and ISA returns. A modest 7% annual return on a stocks and shares ISA, left untouched for 30 years, will grow an initial £10,000 into more than £76,000. The year-by-year table in this calculator makes the acceleration of compound growth tangible, and illustrates why time in the market is often more valuable than market timing.
Frequently asked questions
What is compound growth?
Compound growth occurs when the growth each period is calculated on the accumulated total, not just the original amount. This means growth builds on itself over time. The formula is: Final Value = Starting Value × (1 + rate)^n, where n is the number of periods. Unlike simple growth, compound growth accelerates over time, which is why it is so powerful for long-term investing and so damaging with high-interest debt.
How often should interest compound for the best results?
The more frequently interest compounds, the better the outcome for an investor. Daily compounding produces slightly more than monthly, which produces more than annual. However, the difference between daily and monthly compounding is usually modest. For UK savings accounts, interest is typically compounded daily or monthly. The nominal rate quoted should always be compared using the Annual Equivalent Rate (AER), which accounts for compounding frequency.
What is the difference between compound growth and simple growth?
With simple growth, interest is always calculated on the original principal only. With compound growth, interest is calculated on the principal plus all previously accumulated interest. Over short periods the difference is small, but over decades it becomes enormous. For example, £10,000 growing at 7% simple interest for 30 years becomes £31,000. At 7% compound interest it becomes over £76,000.
Why does starting early matter so much with compound growth?
Because compound growth is exponential, the earlier you start, the longer your money has to compound and the greater the final value. Starting at 25 rather than 35 does not just add 10 years of returns — it adds 10 years of growth on top of all the growth that was already accumulating. This is why financial planners consistently emphasise starting pension and ISA contributions as early as possible, even if the initial amounts are small.