Compound Interest: The Math Behind Wealth Building

Try it live: Want to skip the maths and see your own numbers? Run them through the free Compound Interest Calculator — no signup, no data stored, just the result.

If you put £100 in a savings account at 5% interest, you earn £5 in year one. Simple. But in year two, you earn interest not just on the original £100, but on the £105 now sitting in the account. That small difference — interest earning interest — is compound interest, and over decades it is the single most powerful force in personal finance.

It is also a beautifully small piece of mathematics. The whole thing fits in one formula, and once you can code it, you can answer questions no bank brochure will answer for you: How long until my money doubles? What does an extra £50 a month actually buy me in 30 years?…