Project savings growth with regular contributions ā and see what the balance is actually worth after inflation.
Works in any currency. Contributions are added at the end of each month.
Compound interest pays interest on your interest. The balance after t years on a lump sum is:
A = P Ć (1 + r/n)nĀ·t
P = starting amount Ā· r = annual rate as a decimal Ā· n = compounding periods per year Ā· t = years.
Regular contributions are handled separately, because each one compounds for a different length of time. This calculator converts your nominal rate into an effective annual rate, then into an equivalent monthly rate, and steps through the balance month by month ā which is exactly how a savings account or index fund actually behaves.
The same 7% behaves differently depending on how often it is applied. On a 10,000 lump sum over one year:
| Compounding | Effective rate | Balance after 1 year |
|---|---|---|
| Yearly | 7.000% | 10,700 |
| Half-yearly | 7.123% | 10,712 |
| Quarterly | 7.186% | 10,719 |
| Monthly | 7.229% | 10,723 |
| Daily | 7.250% | 10,725 |
| Continuous | 7.251% | 10,725 |
The gap between yearly and daily is small over one year but compounds into a real difference over decades.
A balance of 500,000 in thirty years is not 500,000 of today's spending power. Entering an inflation rate divides the final balance by (1 + inflation)years to show the real value ā the number that actually tells you what the money will buy.
Simple interest is paid only on the original amount, so 1,000 at 10% earns 100 every year forever. Compound interest is paid on the balance including past interest, so year two earns 110, year three earns 121, and so on. Over long periods the difference is enormous.
Use whatever your account actually does. Most savings accounts and loans compound monthly or daily; bonds often pay half-yearly. If you do not know, monthly is the closest approximation for most retail products.
At the end of each month, which is the conservative assumption and matches how most salary-funded savings work. Contributing at the start of the month would produce a slightly higher balance.
That is your judgement, not a fact this tool can supply. For context, long-run global equity returns have historically averaged roughly 7% a year before inflation, but any individual decade can be far higher or lower ā including negative.
No. Investment and interest income are taxed very differently across countries, so the projection is pre-tax. Reduce your assumed rate if interest is taxed annually where you live.