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Compound Interest Calculator
Compounding is the only force in personal finance that rewards doing nothing. The maths is simple; the discipline of leaving it alone is not.
Monthly, quarterly, annual or daily · Real-value toggle
At a glance
Interactive calculator
Live — results update as you type
Set the assumptions
The two variables that matter most are time and contribution.
Projected balance
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Why the curve looks flat then explodes
Earnings earn earnings
After five years this plan holds $99,945. After twenty it holds $601,701 on the same contributions. The crossover is where compounding stops being a theory and starts being most of your balance.
Frequency is a minor lever
Monthly versus annual compounding on the same nominal rate is worth a few basis points a year. Contribution size and time dominate it, which is why the start date matters more than the account.
Nominal is a comfortable lie
A $1m balance in 30 years sounds transformative until you convert it at 2.5% inflation, where it is worth about $476,000. Always check which of the two numbers you are being shown.
$20,000, then $1,000 a month for 25 years
At 7% compounded monthly, $20,000 plus $1,000 a month reaches $924,580 in 25 years. You contributed $320,000; compounding supplied $604,580 — 2.9 times your own money.
The curve is flat for a long time. After five years the balance is $99,945. After ten, $213,278. After twenty, $601,701. Most of the growth happens in the final third, which is precisely when people who started late decide it is not working.
Compound interest questions
What return should I assume for Australian shares?
Long-run Australian and global equity returns have landed near 7–9% nominal before fees and tax. Most planners model 6.5–7.5% for a growth portfolio, and 4–5% for a balanced one. Assuming 10%+ is how projections end up disappointing.
Is compound interest taxed along the way?
Inside super, earnings are taxed at 15% and 0% in pension phase. Outside super, you pay tax on dividends and distributions each year and capital gains on disposal, with the 12-month CGT discount for individuals. This calculator is pre-tax.
Why does my actual balance differ from the projection?
Because returns are not constant. A projection assumes a smooth average; markets deliver the same average through a volatile path. Sequence matters enormously in the drawdown phase, and hardly at all while you are accumulating.
Does adding money monthly or yearly make a big difference?
Monthly contributions usually beat annual ones by roughly half a year's return on the average contribution — meaningful but not transformative. Automating monthly is worth more for the behavioural effect than the arithmetic.
What is the Rule of 72?
Divide 72 by the annual return to get the doubling time. At 7%, money doubles every 10.3 years. It is an approximation, but accurate enough to be useful in conversation.
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Projections assume a constant rate of return, which no investment provides. They exclude tax, fees, inflation (unless selected) and volatility. Actual results will differ, potentially materially. General information only.
Reviewed November 2026 · FY2026–27 rates and thresholds