Project your investment growth with accurate compound interest math — including contributions, inflation adjustment, and a year-by-year breakdown.
Fill in your investment details and press Calculate to see your projected growth.
| Year | Total Contributed | Interest Earned | Balance |
|---|
Compound interest is interest calculated on both your original principal and all previously earned interest. Because interest is added to the principal before the next calculation, your balance grows exponentially — not linearly. The longer you stay invested, the more dramatic the effect.
The difference is concrete. At 8% simple interest, $10,000 becomes $26,000 after 20 years. With monthly compounding at the same rate, it grows to approximately $49,268. Same rate, same money — the only difference is how interest is calculated each period.
Lump sum formula: A = P(1 + r/n)nt. For regular end-of-period contributions (ordinary annuity): FV = C × [((1 + rc)N − 1) / rc] — where rc is the effective rate per contribution period and N is total contribution periods. This calculator applies both formulas correctly and combines them.
More frequent compounding produces slightly higher effective returns. Monthly compounding at 8% yields an effective annual rate of 8.30%; annually it's exactly 8.00%. The gap between monthly and daily is negligible. What matters far more is the rate itself and the time horizon.
Simple interest always calculates earnings on the original principal only — the same fixed amount every period. Compound interest recalculates the base after each period, so last period's gains become this period's starting point. Over decades, this distinction creates a gap that no amount of catch-up investing can fully close.
Time is the single most important variable in compound growth. Every year you delay doesn't just cost you 12 months of contributions — it costs you all the compounding that would have accrued on every dollar already invested. These figures use $500/month contributions, 8% annual return, monthly compounding:
| Start Age | Monthly Contribution | Years Invested | Projected Balance |
|---|---|---|---|
| 25 | $500 | 40 years | ~$1,746,000 |
| 35 | $500 | 30 years | ~$745,000 |
| 45 | $500 | 20 years | ~$295,000 |
| 55 | $500 | 10 years | ~$91,500 |
The person starting at 25 contributes $60,000 more than the one starting at 35 — yet ends up with over $1 million more. That gap isn't from extra savings. It's compound growth on money that had more time to work.
Every dollar you contribute begins compounding from the moment it's invested. Earlier contributions have more compounding periods ahead of them, which amplifies their impact well beyond the nominal amount deposited.
At 8% over 30 years, $100/month grows to roughly $150,000. The same scenario at $500/month produces nearly $745,000 — five times more, proportional to the contribution. The compounding multiplier stays constant; the variable you control is how much you put in and how consistently.
Contributing weekly or biweekly means each dollar enters the market slightly sooner, gaining extra compounding periods per year. For larger contributions over long horizons this adds real value — but consistency over time is what produces the most significant outcomes.
Combining an initial lump sum with regular contributions is the most powerful setup. The lump sum provides an immediate compounding base; ongoing contributions continuously expand it. The two effects grow independently and combine — which is why this calculator shows them separately in the year-by-year table.
Nominal returns tell you the account balance. Real returns tell you what that balance will actually buy. At 3% annual inflation, $1,000,000 in 30 years has the purchasing power of approximately $412,000 in today's dollars. For retirement planning, the real figure is what matters.
The inflation-adjusted value in this calculator uses: Real Value = Nominal Balance ÷ (1 + inflation)years. A common planning shortcut is to subtract your inflation assumption from the expected return rate before running projections — at 8% nominal and 3% inflation, your real return is approximately 4.9%.
Start with your initial lump-sum investment ($0 is fine). Then set your contribution amount and the frequency you'll contribute. Add your expected annual return rate and time horizon. Decimal years are supported — 20.5 years calculates precisely.
Select how often your account compounds interest. Monthly is standard for most brokerage and retirement accounts. All calculations use end-of-period (ordinary annuity) convention — the standard for financial planning tools.
Open the advanced section to enable inflation adjustment, which converts your result into today's purchasing power. Enable the 4% rule toggle to estimate sustainable annual retirement income based on your projected balance.
The results panel shows your final balance, contributions vs. interest split, and any enabled advanced figures. The growth chart and year-by-year table let you trace exactly how your balance builds. Use "Share Link" to save your scenario.