Compound interest calculator
Your savings and investments can grow more quickly over time through the magic of compounding. See how big a difference it could make for your money — in Kenyan shillings.
How compound interest works
A short refresher before you play with the numbers above.
Interest earns interest
Compound interest is calculated on your original savings plus every bit of interest already earned — not just the amount you started with, like simple interest.
Consistency compounds
A modest monthly contribution, kept up for years, usually outgrows a larger one-off deposit left untouched for a shorter stretch.
Time is the real multiplier
The gap between simple and compound interest looks small in year one. By year twenty, it's usually the majority of your balance.
The formula behind it
A = P(1 + r/n)^(nt) for the principal, plus a running future-value sum for monthly contributions — this calculator does both, month by month.
Frequently asked questions
What is compound interest?
Compound interest is interest calculated on both your original savings and the interest that's already accumulated. Unlike simple interest, which only ever applies to your starting amount, compound interest lets your balance grow faster the longer it's left invested.
How is compound interest calculated in this calculator?
This calculator applies your annual interest rate monthly (rate ÷ 12) to your running balance, then adds your monthly contribution — repeated for every month across your chosen investment horizon. It also tracks a simple-interest comparison so you can see the difference compounding makes.
Does a higher monthly contribution or a higher interest rate matter more?
Both matter, but time usually matters most. A lower rate held for twice as long can outgrow a higher rate held for half the time, because compounding needs time to take effect. Try changing the years field and watch the projected value move.
What interest rate should I use for Kenyan money market funds?
Kenyan MMFs have historically returned roughly 9-16% per year depending on the fund and prevailing interest rates, though this varies and isn't guaranteed. Check your specific fund's current effective annual rate rather than assuming a fixed figure.
Is this calculator's result guaranteed?
No — it's a projection based on a constant interest rate and consistent contributions, useful for comparing scenarios. Real returns fluctuate, and past performance never guarantees future results.