What Compound Growth Actually Does to Regular Investing
This calculator applies the compound-interest formula A = P(1+r/n)nt to your starting balance and adds the future value of every monthly contribution. It is the same arithmetic behind retirement projections — the only honest caveats are the inputs: real markets do not return a smooth percentage every year, so treat results as a planning baseline, not a promise.
A concrete example: the last decade matters most
Start with $10,000, add $250 a month, and assume 7% compounded monthly. After 20 years you would have about $170,600. After 30 years: about $386,200 — from just $100,000 of total contributions. More than half of the final balance arrives in the final decade, because compounding is back-loaded: growth earns growth. This is the mathematical case for starting early even with small amounts.
The Rule of 72
Divide 72 by your annual return to estimate doubling time: at 7%, money doubles roughly every 72 ÷ 7 ≈ 10.3 years. It is an approximation of the exact logarithmic answer, but accurate enough for mental math between about 4% and 12% — and useful for sanity-checking any projection this calculator gives you.
How to choose honest inputs
Long-run U.S. stock returns have historically averaged high single digits before inflation, but any individual decade can differ wildly. Consider running the calculator three times — a conservative, expected, and optimistic rate — and planning around the conservative case. Remember fees: a 1% annual fee does not reduce your result by 1%; it compounds against you the same way returns compound for you.
Frequently asked questions
Does the calculator account for taxes?
No — results are pre-tax. In tax-advantaged accounts (401(k), IRA) growth compounds untaxed until withdrawal, which is one reason those accounts outperform identical taxable investing.
Is monthly or annual compounding assumed?
Monthly, which matches how most savings products and index-fund reinvestment effectively behave. The difference from annual compounding at the same nominal rate is small but real.
What return should I assume for a savings account?
Use the account's current APY, not stock-market figures. High-yield savings rates change with Federal Reserve policy, so re-check the rate rather than assuming it holds for decades.
Last updated: August 8, 2026 · Reviewed by the DollarDrill editorial team. Formulas follow standard published methods; see our editorial standards & sources. Results are educational estimates, not financial advice.