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Compound Interest Calculator

See how a lump sum grows with compounding.

Reviewed by The QuickCalc Editorial Team · Last updated · About our methodology

Enter your details

Result

Future value
R221 964,02
Interest: R121 964,02

Inputs & results at a glance

Updates live as you change the form above.

ItemTypeValue
PrincipalInputR100 000,00
RateInput8%
TermInput10 years
Compounds/yrInput12
Future valueResultR221 964,02

About this calculator

Compound interest is what happens when the interest earned on a lump sum is reinvested and itself earns interest in subsequent periods. Over long horizons the effect is exponential rather than linear, which is why Einstein reportedly called it the eighth wonder of the world.

The calculator uses the standard compound-interest formula A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate, n is the number of compounding periods per year and t is the time in years. Monthly compounding produces slightly higher results than annual compounding at the same nominal rate.

In South Africa, long-term compounding is best captured by growth-oriented investments like unit trusts and JSE index funds. The FTSE/JSE All Share has averaged around 12% p.a. nominally over decades. A R100,000 investment left to compound at 10% for 30 years grows to roughly R1.74 million — about 17 times the original amount — with no additional contributions.

How to use it

  1. 1Enter the principal. The starting lump sum.
  2. 2Enter the interest rate. The expected annual rate as a percentage.
  3. 3Choose the time horizon. The number of years the money will compound.
  4. 4Read the future value. The projected value at the end of the period.

How it works

The calculator compounds a single lump sum forward at your chosen annual rate and compounding frequency. Compounding is the process by which each period's interest is added to the balance, so the next period's interest is calculated on a larger amount — producing exponential rather than linear growth.

Over long horizons, small differences in the rate produce huge differences in outcome. R100,000 compounded for 30 years grows to R432,000 at 5%, R1,006,000 at 8% and R1,745,000 at 10%. This is why long-term investors focus intensely on fees and asset allocation — a 1% higher net return over 30 years is not a 1% richer outcome; it's often 20–30% richer.

Formula

A = P × (1 + r/n)^(n×t)

P = principal; r = annual rate as decimal; n = compounding periods per year; t = years; A = final amount.

Worked examples

R50,000 at 10% for 20 years

Compounded monthly ≈ R366,000.

R100,000 at 8% for 30 years

Compounded monthly ≈ R1,092,000.

Frequently asked questions

What is compound interest?

Interest calculated on the original principal AND on accumulated interest from prior periods. It's why time is the single biggest lever in growing wealth.

Monthly vs annual compounding — does it matter?

It makes a small difference. At 10% p.a. over 20 years, monthly compounding grows a lump sum roughly 5% more than annual compounding.

What's a realistic long-term return in South Africa?

The JSE All Share has averaged around 12% p.a. nominally over the long term. A balanced unit trust typically targets CPI + 4–5%.

Does this include contributions?

No — this calculator is for a single lump sum. Use the Savings Calculator when you're adding monthly deposits.

Is the return before or after tax?

Before tax. Interest, dividends and capital gains are taxed differently in South Africa — get advice on the tax treatment of your specific investment.

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