What does £50,000 at 4% compound interest for 10 years grow to?
£50,000 at 4% compound interest for 10 years (compounded monthly) grows to £74,542. You would contribute £50,000 in total, and compound interest adds £24,542 on top.
Year-by-year growth
| Year | Interest earned | Balance |
|---|---|---|
| 1 | £2,037 | £52,037 |
| 2 | £2,120 | £54,157 |
| 3 | £2,206 | £56,364 |
| 4 | £2,296 | £58,660 |
| 5 | £2,390 | £61,050 |
| 6 | £2,487 | £63,537 |
| 7 | £2,589 | £66,126 |
| 8 | £2,694 | £68,820 |
| 9 | £2,804 | £71,624 |
| 10 | £2,918 | £74,542 |
Computed with A = P(1 + r/n)nt, contributions added at the end of each month. The same maths applies in any currency.
Related examples
Frequently asked questions
How does compound interest work?
Compound interest means you earn interest on your accumulated balance, not just the original principal. Each period, the rate is applied to the current total — original deposit plus everything it has already earned — so growth accelerates over time rather than staying linear.
How often is interest compounded in this example?
This example uses monthly compounding, the most common frequency for savings accounts. The more frequently interest compounds, the faster your balance grows — daily compounding yields slightly more than monthly, which yields more than annual.
What is the difference between compound and simple interest?
Simple interest applies the rate only to your original deposit, giving linear growth. Compound interest applies the rate to your growing balance, giving exponential growth. Over long periods the difference is enormous, especially with regular contributions.
Does the interest rate or the time period matter more?
Time typically matters more than rate. A small rate increase helps, but an extra decade of compounding has a dramatically larger effect — this is why starting early is the single most powerful thing you can do for long-term savings.