Compound Interest Calculator
See how your money grows with compound interest, regular contributions, and different compounding frequencies.
Quick Fill
Compound vs Simple Interest
- Simple interest is calculated only on the original principal: Interest = P x r x t. You earn the same dollar amount every year.
- Compound interest is calculated on the principal plus all accumulated interest. You earn interest on interest - and the effect accelerates over time.
- More frequent compounding (e.g., daily vs annually) produces slightly higher returns because interest is reinvested sooner. The difference is captured by the Effective Annual Rate.
- Regular contributions dramatically increase the final value. Even small monthly additions compound significantly over long periods - this is the power of dollar-cost averaging.
- The Rule of 72: divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 7%, it takes roughly 10.3 years.
Save this compound interest calculator result?
Sign up to stay on top of webinars, news and events.
No spam. Unsubscribe any time.
The power of compound interest for Australian businesses and investors
Albert Einstein is often credited with calling compound interest the eighth wonder of the world. Whether or not the attribution is accurate, the principle is sound: when interest is earned on both the original principal and the accumulated interest from previous periods, the growth curve is exponential rather than linear.
For business owners, compound interest applies to both savings and debt. Money held in a business savings account or term deposit compounds in your favour. Meanwhile, outstanding debts - credit cards, business loans, overdue supplier invoices with interest charges - compound against you. Understanding the mechanics helps you make better decisions about where to deploy capital.
How to use this compound interest calculator
- Enter your starting principal (the initial lump sum you are investing or depositing).
- Set the annual interest rate and choose the compounding frequency - daily, monthly, quarterly, or annually.
- Add any regular contributions (e.g., monthly deposits) to see how consistent saving accelerates growth.
- Specify the investment period in years to generate a year-by-year breakdown and total interest earned.
Australian interest rates and savings context
The three factors that have the biggest impact on compound growth are the interest rate, compounding frequency, and time. As of 2025, Australian high-interest savings accounts offer between 4.5% and 5.5% per annum, while term deposits range from 4% to 5% depending on the term length. For superannuation, the long-term average return for a balanced fund sits around 7-8% per annum. Plugging these real Australian rates into the calculator gives you a practical view of how your money grows over 5, 10, or 20 years. Starting earlier, even with smaller amounts, almost always beats starting later with larger amounts.
How cash flow management connects to investment returns
Efficient accounts payable processing means your cash position is always clear, supplier payments are timed optimally, and early payment discounts are captured. When you know exactly when cash is leaving the business, you can keep surplus funds earning compound interest for longer. For an Australian business holding $200,000 in a savings account at 5% compounded daily, every extra week that money stays invested earns roughly $190 in interest.
See how Pulsify automates AP →Keep your cash working harder with automated AP
Pulsify automates AP from inbox to ledger - invoice capture, coding, approval workflows, and sync to Xero or MYOB.