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Home/Calculators/Compound Interest Calculator

Compound Interest Calculator

Calculate how your investments grow over time with compound interest. Visualise the power of compounding with interactive charts and see the impact of regular monthly contributions.

Updated March 2026 · SARS 2025/2026 rates

Visual Growth

Interactive charts showing your money growing over time

Monthly Contributions

See the impact of regular monthly deposits on your savings

Flexible Compounding

Choose monthly, quarterly, or annual compounding frequency

How to calculate compound interest

Compound interest is calculated using the formula A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is the compounding frequency per year, and t is time in years. For example, R100,000 invested at 10% compounded monthly for 10 years grows to R270,704 — that's R170,704 in interest alone. Adding R1,000 monthly contributions would grow the total to approximately R477,000.

The key to compound interest is time. The longer your money is invested, the more pronounced the "hockey stick" effect becomes. Starting early — even with small amounts — outperforms starting late with larger amounts.

A = P(1 + r/n)^(nt)  |  FV = PMT × [((1 + r/n)^(nt) − 1) / (r/n)]

Investment Growth Calculator

Enter your investment details to see how your money grows

R

The lump sum amount you are investing today

R

Regular amount added each month (leave blank or enter 0 if none)

Your expected annual return or interest rate

How often interest is calculated and added to your balance

How many years you plan to keep your money invested (1–50)

Ready to Calculate

Enter your investment details and click calculate to see your projected growth with interactive charts

The Power of Compound Interest

Understand why Albert Einstein reportedly called compound interest the "eighth wonder of the world"

Simple Interest vs Compound Interest

Simple interest is calculated only on your original principal. If you invest R10,000 at 10% per year for 10 years, you earn R1,000 per year — R10,000 total, giving you R20,000.

Compound interest earns interest on both your principal and all previously accumulated interest. The same R10,000 at 10% compounded annually grows to R25,937 — R15,937 in pure interest, not just R10,000.

The longer the investment period, the greater the difference. Over 30 years, that same R10,000 at 10% simple interest becomes R40,000, while compound interest grows it to R174,494.

Real Example

Initial InvestmentR10,000
Annual Rate10%
Period10 years
Simple Interest ResultR20,000
Compound Interest ResultR25,937

That's R5,937 more — 59% extra returns — from compounding alone.

72

The Rule of 72

A quick mental maths trick: divide 72 by your interest rate to estimate how many years it takes to double your money.

At 6%Doubles in 12 years
At 8%Doubles in 9 years
At 10%Doubles in 7.2 years
At 12%Doubles in 6 years
At 15%Doubles in 4.8 years

Tips for Maximising Returns

  • Start as early as possible — time is your biggest advantage
  • Reinvest all interest and dividends instead of withdrawing them
  • Add regular monthly contributions to supercharge growth
  • Choose monthly compounding over annual where possible
  • Use Tax-Free Savings Accounts (TFSAs) to shelter returns from tax
  • Minimise fees — a 1% annual fee can cost you 20%+ of final returns over 30 years

Compound Interest Calculator — Frequently Asked Questions

Common questions about compound interest, investment growth, and savings in South Africa

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the principal, compound interest earns interest on interest. This creates exponential growth over time — the longer you invest, the more dramatic the effect. For example, R10,000 at 10% annual compound interest becomes R25,937 after 10 years, not just R20,000 as simple interest would give.
Simple interest is calculated only on the original principal. If you invest R10,000 at 10% simple interest for 10 years, you earn R1,000 per year — R10,000 total interest. Compound interest earns interest on the principal plus all previously accumulated interest. The same R10,000 at 10% compounded annually grows to R25,937 — R15,937 in interest. The difference becomes more dramatic over longer periods and higher rates.
More frequent compounding produces slightly higher returns because interest is added to the principal more often, creating a larger base for future interest calculations. For example, R10,000 at 10% for 10 years: annual compounding = R25,937; monthly compounding = R27,070. The difference grows with higher rates and longer periods. In practice, most savings accounts and fixed deposits in South Africa compound monthly.
The rule of 72 is a quick mental math shortcut to estimate how long it takes to double your money. Simply divide 72 by the annual interest rate. For example: at 10%, your money doubles in approximately 72 ÷ 10 = 7.2 years. At 8%, it takes about 9 years. At 6%, about 12 years. It works for annual compounding and gives a reasonable approximation — the actual doubling time at 10% annual compounding is 7.27 years.
At 10% annual compounding, R10,000 grows to R25,937 after 10 years — that is R15,937 in pure interest, or a 159% total return. With monthly compounding at the same 10%, it grows to R27,070 — slightly more due to more frequent interest crediting. Adding a monthly contribution of R500 would grow the total to approximately R117,000, demonstrating the powerful combination of compounding and regular saving.
In South Africa, typical savings rates vary by product: standard savings accounts offer 4–6%; money market accounts typically offer 7–9%; fixed deposits for 12+ months offer 8–11%; and tax-free savings accounts (TFSAs) offer similar rates with no tax on returns. Over the long term, a diversified equity portfolio has historically returned 10–15% annually. The South African Reserve Bank prime lending rate heavily influences these rates, so shop around regularly for the best available rates.

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Important Disclaimer

Accounter does not provide accounting, tax, business or legal advice. This calculator has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business.