Compound Interest Calculator
See how your savings or investments grow with compound interest and regular contributions, in Kenyan shillings. Includes a year-by-year projection.
Your Savings
Adjust to the real return after tax on your savings account, fixed deposit, unit trust or pension fund.
Growth Projection
Future Value
Ksh 4,768,741
after 10 years at 8% per year
💬 In Plain Words
You put in Ksh 500,000 today and then saved Ksh 20,000 a month. After 10 years you have Ksh 4,768,741 — of that, you only put in Ksh 2,900,000 from your own pocket. The other Ksh 1,868,741 is return the money generated on its own.
| Year | Contributed | Return | Balance |
|---|---|---|---|
| 1 | Ksh 740,000 | Ksh 50,498 | Ksh 790,498 |
| 2 | Ksh 980,000 | Ksh 125,108 | Ksh 1,105,108 |
| 3 | Ksh 1,220,000 | Ksh 225,830 | Ksh 1,445,830 |
| 4 | Ksh 1,460,000 | Ksh 354,831 | Ksh 1,814,831 |
| 5 | Ksh 1,700,000 | Ksh 514,460 | Ksh 2,214,460 |
| 6 | Ksh 1,940,000 | Ksh 707,258 | Ksh 2,647,258 |
| 7 | Ksh 2,180,000 | Ksh 935,977 | Ksh 3,115,977 |
| 8 | Ksh 2,420,000 | Ksh 1,203,600 | Ksh 3,623,600 |
| 9 | Ksh 2,660,000 | Ksh 1,513,356 | Ksh 4,173,356 |
| 10 | Ksh 2,900,000 | Ksh 1,868,741 | Ksh 4,768,741 |
Projections assume a fixed annual return. Actual returns vary and are not guaranteed. Past performance is no guarantee of future returns. This is not financial advice.
The Compound Interest Formula
👋 Simple Explanation
Compound interest is return that earns return: the gain you make starts generating its own gain, and the total grows faster and faster over time.
Compound interest is calculated with this formula:
A = P × (1 + r/n)^(n×t)
Where A = the final amount, P = the starting principal, r = the annual rate (as a decimal), n = the number of times it compounds per year, and t = time in years.
Nominal and Real Return
The return you see advertised is usually nominal. To know what you actually earn you need to subtract inflation: if an investment returns 5% a year and inflation is 2%, your real return is roughly 3%. When planning long term, use cautious assumptions and think in real terms. Remember too: compound interest works for you in saving, but against you in credit card debt, where interest also compounds.
Frequently Asked Questions
- What is compound interest?
- Compound interest is the return calculated on both your original principal and the return that has already been added from previous periods. Unlike simple interest (which applies only to the principal), compound interest grows exponentially over time.
- Should the rate I enter be before or after tax?
- For a realistic projection, use the return after tax. On a savings account or fixed deposit, interest is taxable and the bank deducts 15% withholding tax at source. Distributions from a unit trust or mutual fund can also be taxed. If you enter the gross return the final figure will be too high.
- How do regular contributions affect the compounding effect?
- Regular contributions accelerate wealth building significantly, because each new contribution in turn starts earning a return. Contributing a fixed amount every payday, on top of an initial deposit, can multiply the final result several times over — which is how a monthly unit trust or pension contribution builds up over a working life.