Compound Interest
Punch in your numbers and watch what time and interest can do.
Compound interest is interest calculated on your original deposit plus all the interest you've already earned. Each year (or month, depending on the schedule), the base you're earning on gets bigger, so the growth curve isn't a straight line. It bends upward the longer you leave the money alone.
This calculator supports two modes. Lump sum assumes you deposit once and let it grow at a fixed annual rate. Regular assumes you also add a fixed amount every month on top of the starting balance, compounded monthly. Both modes use the same core principle: rate and time matter more than the size of any single contribution.
Try changing just the years field and watch the final amount move. Time is usually the biggest lever you have, bigger than chasing a slightly higher interest rate.
Results are for illustration only and do not constitute financial advice. Consult a qualified financial adviser before making decisions based on these figures.
Say you invest a R10,000 lump sum at 8% per year and leave it for 20 years with no further contributions. At the end of year 20, you'd have roughly R46,600, more than four and a half times your original deposit, even though you never added another rand.
Now add a monthly contribution of R500 to that same starting amount and rate. After 20 years, you'd have closer to R310,000. The extra R120,000 you contributed over those 20 years grew into nearly R190,000 of value once compounding had time to work on it.
Run both scenarios through the calculator above to see the exact numbers and the year-by-year curve. The gap between the two only gets wider the longer you leave it.
This calculator assumes a constant annual rate for the whole period. Real returns fluctuate year to year, and this doesn't factor in tax on interest, inflation, or fees your fund or bank might charge.
Results are for illustrative purposes only and do not constitute financial advice.
Compound interest is interest earned on both your original deposit and on the interest that deposit has already accumulated. Unlike simple interest, which only ever applies to the original amount, compound interest means your balance grows faster each year because the base it's calculated on keeps increasing.
For a lump sum compounding annually, the formula is A = P(1 + r)^t, where P is the principal, r is the annual interest rate, and t is the number of years. For regular monthly contributions, the calculator compounds monthly and adds each new contribution to the growing balance before applying the next month's interest.
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on the principal plus all interest earned so far, so it grows on a curve that gets steeper over time. Over short periods the difference is small; over 10+ years it becomes significant.
No. This calculator shows gross investment growth before tax. In South Africa, interest income is taxed (with an annual exemption of R23,800 for individuals under 65, R34,500 for 65 and older, as of the 2024/2025 tax year), and a tax-free savings account or retirement product may shelter growth differently. Factor your own tax position in separately.
Time generally has the bigger effect, because compounding needs periods to multiply through. Doubling your investment horizon from 10 to 20 years usually grows your final amount by far more than a 1–2 percentage point increase in rate over the same period. Try both adjustments in the calculator above to see which moves your result more.
These results are for illustration only and are not financial advice — always consult a qualified financial professional before making financial decisions.