Compound Interest Calculator
See how your savings grow over time with compound interest and regular monthly contributions.
Investment Summary
Year-by-Year Growth
Enter your investment details to see year-by-year growth.
How Compound Interest Works
Compound interest means you earn interest on your interest. Each period, your returns are added to your balance, so the next period's interest is calculated on a larger amount. This creates exponential growth over time.
The Compound Interest Formula
FV = P(1+r)n + PMT × [((1+r)n - 1) / r]
Where P is the initial principal, r is the periodic interest rate, n is the number of compounding periods, and PMT is the regular contribution amount.
Why Start Early?
The earlier you start investing, the more time compound interest has to work. Someone who starts saving R1,000/month at age 25 will have significantly more at retirement than someone who starts at 35, even though the difference in contributions is only 10 years' worth.
Typical Returns in South Africa
Money market accounts typically offer 7-9% per year. Balanced unit trusts historically return 9-12% over the long term. Equity-only funds can return 12-15% but with more volatility. Always consider inflation (around 5-6% in SA) when evaluating real returns.