Compound interest calculator
Free compound interest calculator for Australian school leavers. Model lump-sum and regular-deposit savings, or work backwards from a goal to find the deposit you need each month. No signup. No data leaves your browser.
High-interest savings accounts: 4-5%. Long-term diversified shares: 7-8% average.
Final balance
$14,885
Total contributions
$13,000
Total interest earned
$1,885
Year-by-year breakdown
| Year | Balance | Contributions to date | Interest to date |
|---|---|---|---|
| 0 | $1,000 | $1,000 | $0 |
| 1 | $3,507 | $3,400 | $107 |
| 2 | $6,142 | $5,800 | $342 |
| 3 | $8,912 | $8,200 | $712 |
| 4 | $11,824 | $10,600 | $1,224 |
| 5 | $14,885 | $13,000 | $1,885 |
How the maths works
Compound interest pays you interest on your interest. With principal P, annual rate r, compounded n times per year for t years, the final balance is:
If you also deposit a fixed amount D at the end of every compounding period (an annuity-immediate), the future value of those deposits is:
The calculator adds these two and rounds to the nearest cent. In savings-goal mode, it solves the same equations for D given a target balance.
Frequently asked
- What interest rate should I use?
- For a high-interest savings account, 4 to 5 percent is realistic in 2026. For long-term investments in diversified shares or an index ETF, 7 percent per year is the commonly used long-run average. Cash in a transaction account earns close to zero.
- Is compound interest taxed?
- Yes. Interest from a bank account is taxable income and goes on your tax return. The bank reports it to the ATO. If you are under 18 and earning unearned income above the kiddie-tax threshold, special rules apply. See the ATO for details.
- Why does the final balance change so much when I bump the rate by 1 percent?
- Because compounding is exponential. A 1 percentage-point increase over 30 years can mean tens of thousands of dollars more, because the extra interest each year itself earns interest in following years.
- How is this different from the Moneysmart calculator?
- We use the same standard formulas as ASIC Moneysmart. The maths is identical. Our calculator adds an inverse mode that solves for the required regular deposit when you have a savings goal, and shows a year-by-year breakdown by default.
- Does the calculator account for inflation?
- No. The figures are nominal, not real. $10,000 in 10 years buys less than $10,000 today. As a rough adjustment, subtract about 2.5 percent per year from your assumed interest rate to see roughly what the final balance is worth in today's money.
Related
- Why super matters most at 18 (compounding for 50 years on automatic contributions).
- First Home Super Saver (compounding inside super at lower tax).
- HECS-HELP repayment calculator
- All money explainers
ExamExplained does not provide financial advice. The calculator implements the standard compound-interest formulas published by ASIC Moneysmart. Real-world returns vary year-to-year, may be reduced by fees and tax, and are not guaranteed. For advice on your circumstances, see a licensed financial adviser.