A worked savings example with an editable calculator.
The worked answer
GBP 10,000 at 1% nominal annual interest, compounded daily for 52 weeks, earns GBP 100.22 interest. The estimated final balance is GBP 10,100.22, with no extra deposits.
52 weeks is 364 days, one day short of this calculator’s 365-day model year. The daily rate is 0.01 ÷ 365; interest is added to the interest-earning balance each model day.
10,000 × (1 + 0.01 ÷ 365)364 = 10,100.2235687827…
The answer uses a nominal rate. With 1% APY/AER instead, the effective-yield model gives GBP 10,099.72 over the same 364 days. Choose the rate type your provider quotes; fees, tax and account rules can change actual returns.
The calculator below is prefilled for this public example. Change any values and select Calculate for your own estimate. Open the general compound interest calculator.
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Your result
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Estimate from stated assumptions, not personal financial advice. Rates, fees, tax and account rules may change actual interest. Calculator disclaimer.
How compound interest works
Compound interest earns interest on your savings and on earlier interest. Regular deposits add to the balance earning interest.
Formula & worked example
For a monthly-deposit example, enter GBP 10,000, 1% nominal annual interest, Monthly compounding, and 1 Year. Under Add extra money, enter GBP 100, Monthly, and End of each completed period.
After one year, the balance is GBP 11,305.97: GBP 10,000 starting money, GBP 1,200 in deposits and GBP 105.97 interest.
With deposits, each deposit earns interest from its selected start or end time. In a partial final period, a start deposit is included when that period begins; an end deposit requires a completed period.
The annual rate uses a 365-day model year: a week is 7 days, and a month is 1/12 of a year. Weekly compounding happens every 7 days; monthly compounding uses equal months. So 52 weeks is 364 days. Partial periods use the equivalent fractional growth factor. Choose Days and daily compounding for a duration measured in days.
Daily, weekly or monthly compounding?
Choose the compounding convention in your account’s terms. This model uses 365 daily periods, seven-day weekly periods or 12 equal monthly periods per year; it applies a fractional growth factor for a partial period.
For GBP 10,000 at 5% nominal annual interest over 1 Year, with no extra deposits, the final balance is GBP 10,511.62 monthly, GBP 10,512.46 weekly or GBP 10,512.67 daily.
At the same nominal rate, more frequent compounding increases this model’s result slightly. Changing the choice changes an assumption; it does not change the interest your provider pays.
Using APY or AER
If your provider quotes APY or AER, enter that percentage and select Effective annual yield (APY/AER) in Advanced options. For GBP 10,000 at 5% APY/AER over 1 Year, with no extra deposits, the model ends at GBP 10,500.00 for daily, weekly or monthly compounding. Adding compounding again would overstate the quoted yield.
Rates & assumptions
A nominal rate is divided by the compounding frequency. APY/AER is an effective annual yield that already includes compounding; the calculator converts it to the equivalent periodic rate.
The model uses equal periods and a constant, non-negative rate. It does not model fluctuating investment returns or market losses.
Fees, tax, inflation, rate changes and bank crediting rules are excluded. Currency changes formatting only, with no exchange conversion. Results are estimates, not guaranteed returns or personal financial advice. Full disclaimer.
Privacy
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Contact & references
Made by IT1ST. Report errors to compound_interest_calculator@it1st.com using example values, without private account details.
References: CFPB annual percentage yield formula and interest accrual and compounding. Check your provider’s terms for its specific convention.