Project how an initial deposit and monthly contributions grow over time, at any compounding frequency.
| Year | Contributions to date | Interest earned | Balance |
|---|
At the end of your chosen term.
Compound interest means interest earns interest. The more often it's applied — daily instead of annually, say — the sooner each bit of interest starts earning its own return, which is why the same quoted annual rate produces a slightly higher effective annual rate at higher compounding frequencies.
For a lump sum: A = P(1 + r/n)ⁿᴪ, where P is principal, r is the annual rate, n is compounding frequency per year, and t is years. This tool extends that to also add a monthly contribution before each compounding step.
The projection assumes a constant annual rate for the entire period, which real markets never quite deliver — returns vary year to year. Treat the final balance as a long-run estimate, not a guarantee.
The quoted rate is the nominal annual rate. The effective annual rate (EAR) accounts for compounding frequency, so it's always slightly higher when compounding happens more than once a year — that's the number shown as 'Effective annual %' above.
This tool adds your monthly contribution before applying that period's compounding, which is a common conservative convention. Some accounts compound before adding new deposits — the difference is usually small over long periods.
Long-run stock market averages have historically been in that range before inflation, but any specific year can be far higher or lower. Use a rate you're comfortable being wrong about in either direction.