Use a range
The conservative, expected and optimistic rows show how sensitive a long plan is to a small return change.
Compound Interest Calculator
See how an investment could grow over time—and how much of the result actually comes from compounding.
Your assumptions
Change any value to update the projection instantly.
USD
USD
%
years
%
%
%
%
Estimated future value$397,521Nominal value after fees
Total contributed$130,000
Investment growth$267,521
Today's purchasing power$220,098
Conservative (8%/yr)$309,581
Expected (10%/yr)$397,521
Optimistic (12%/yr)$513,310
Educational estimate only. Actual returns vary and are not guaranteed.
How does compound interest work?
For a lump-sum investment, future value depends on the principal, periodic return and number of compounding periods. This calculator simulates monthly periods to support recurring contributions.
FV = P(1 + r/n)^(nt) + PMT × [((1 + i)^m − 1) / i]
- P: initial principal
- PMT: recurring contribution
- r: annual return after fees
- t: investment period in years
How to use the result
Try at least three return scenarios: conservative, base and optimistic. Focus on the inflation-adjusted value rather than only the nominal headline number.
Frequently asked questions
What is compound interest?
Compound interest is growth earned on both the original principal and returns accumulated in prior periods.
What expected return should I use?
Use several conservative scenarios rather than one fixed number. Historical performance does not guarantee future results.
Why include inflation?
Inflation reduces future purchasing power. The real-value estimate expresses the result in today's money.
Build a projection you can trust
A useful compound-interest result is not one large number. It is a range built from transparent assumptions about return, fees, inflation, contribution growth and contribution timing.
Count the fee drag
Growth and annual asset fees are combined geometrically instead of subtracting two headline percentages.
Separate nominal and real value
The inflation-adjusted result translates future money back into today's purchasing power.
Model rising contributions
If your monthly investment rises with salary or inflation, enter that annual increase instead of assuming a flat contribution forever.
Step-by-step example
Worked example: the cost of one assumption
Start with $10,000, add $500 at each month-end for 20 years, and compare several net-return paths.
- Enter the amount already invested and the amount you can repeat every month.
- Use a return based on the asset mix—not the best year you remember.
- Add fund/platform fees and a long-run inflation estimate.
- Compare the range and purchasing-power result before making a decision.
Takeaway: The gap between scenarios widens over time because every earlier return also has more time to compound.
ContributedBase
Conservative path− variance
Expected pathBase return
Optimistic path+ variance
What should you enter for a better result?
| Field | What to enter | Why it matters |
|---|---|---|
| Expected return | Use a long-run estimate appropriate for the portfolio after checking several periods. | Largest source of projection uncertainty. |
| Annual fees | Include fund expense ratios, advisory and platform fees charged on assets. | A recurring drag that compounds too. |
| Inflation | Use a long-run assumption, then stress-test it higher. | Changes future purchasing power. |
| Contribution increase | Use 0% for a flat nominal amount, or a realistic annual raise. | Can materially change long plans. |
Cross-checked against major and official sources
These references were used to cross-check input design, formulas, model limits or current rules. Links open in a new tab so you can verify the methodology yourself.
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