Compound growth calculator
Compounding means earning returns on earlier returns, and time does most of the work. Enter a starting amount, a monthly contribution and an assumed return to see how the balance could build, and how much of it is your own money.
Ending balance
$292,465.03
- Total contributed
- $130,000.00
- Growth
- +$162,465.03
- In today's dollars
- $178,482.91
- After inflation
| Year | Contributed | Growth | Balance |
|---|---|---|---|
| 1 | $16,000.00 | $890.15 | $16,890.15 |
| 2 | $22,000.00 | $2,262.61 | $24,262.61 |
| 3 | $28,000.00 | $4,151.14 | $32,151.14 |
| 4 | $34,000.00 | $6,591.87 | $40,591.87 |
| 5 | $40,000.00 | $9,623.45 | $49,623.45 |
| 6 | $46,000.00 | $13,287.24 | $59,287.24 |
| 7 | $52,000.00 | $17,627.49 | $69,627.49 |
| 8 | $58,000.00 | $22,691.56 | $80,691.56 |
| 9 | $64,000.00 | $28,530.12 | $92,530.12 |
| 10 | $70,000.00 | $35,197.38 | $105,197.38 |
| 11 | $76,000.00 | $42,751.34 | $118,751.34 |
| 12 | $82,000.00 | $51,254.09 | $133,254.09 |
| 13 | $88,000.00 | $60,772.02 | $148,772.02 |
| 14 | $94,000.00 | $71,376.21 | $165,376.21 |
| 15 | $100,000.00 | $83,142.70 | $183,142.70 |
| 16 | $106,000.00 | $96,152.83 | $202,152.83 |
| 17 | $112,000.00 | $110,493.68 | $222,493.68 |
| 18 | $118,000.00 | $126,258.39 | $244,258.39 |
| 19 | $124,000.00 | $143,546.62 | $267,546.62 |
| 20 | $130,000.00 | $162,465.03 | $292,465.03 |
For education only, not investment advice. Results are estimates based on what you enter, and they leave out anything not shown, such as slippage and most taxes. Check the numbers with your broker or a licensed professional before acting on them.
The formula
- Monthly rate
- (1 + annual return) ^ (1/12) - 1
- Balance
- start x (1 + annual return) ^ years + contribution x ((1 + monthly rate) ^ months - 1) / monthly rate
Worked example
You start with $10,000, add $500 at the end of each month and assume a 7% annual return for 20 years.
- Your own money: $10,000 + ($500 x 240 months) = $130,000.00
- Ending balance: $292,465.03
- Growth: $292,465.03 - $130,000.00 = $162,465.03
More than half of the $292,465.03 ending balance comes from growth. With 2.5% inflation, that balance would buy what about $178,482.91 buys today.
How to think about the return you enter
The rate here is an effective annual return, so 7% grows $1,000 to exactly $1,070 over a year with no contributions. A savings account's APY is quoted the same way, and the difference from other compounding conventions is small.
For stocks, the steady line is a simplification. Real markets go up and down, and the order of returns matters once you are adding or withdrawing money. Try a lower rate as well as a higher one and treat the output as a range. A fund's fees also come off the return, so a 7% market return with 1% in costs is really 6%.
Time beats the rate
Increasing the years usually changes the result more than a modest change in the return. Compare 20 and 30 years with the same contribution, and notice in the table how much of the balance arrives in the last few years. That's why starting earlier counts for so much, and why stopping contributions early costs more than it seems to.
Frequently asked questions
What return should I assume?
That's your call, and a lower figure is the cautious choice. US stocks have historically returned about 10% a year before inflation over long stretches, with large swings and no guarantee of repeating. Many planners use lower rates than that.
Are contributions made at the start or end of the month?
At the end of each month, a common and slightly cautious assumption. The dollar-cost averaging calculator buys at the start of each period instead.
Does this include taxes?
No. Taxes on dividends and gains can reduce the result in a regular brokerage account, while retirement accounts defer or avoid them depending on the type.
What does the inflation figure do?
It shows the ending balance in today's purchasing power. It doesn't change the balance itself, only how much that balance would buy.