Enter a starting amount, monthly contribution, annual return and time horizon to see what it compounds into. A year-by-year chart and table show how contributions and gains stack up, and you can factor in tax and inflation to see the result in today's money.
Compounding means each period's gains are added to the balance, so the next period earns returns on those gains too. That is why the gains area of the chart overtakes the contributions area as the horizon lengthens — with compounding, time is often a bigger lever than the rate itself.
Shorter compounding periods produce a larger final figure. At the same nominal 5%, monthly compounding beats annual compounding — though the gap is much smaller than the effect of changing the rate or the time horizon.
The 'rule of 72' gives a quick estimate: divide 72 by the annual return to approximate the years needed to double your money. At 6% that is about 12 years; at 8%, about 9 years.
Enter an inflation rate to convert the future amount into today's purchasing power. Three percent inflation over 20 years cuts the real value of a fixed sum to roughly 55%, so long-horizon plans are worth checking in real terms.
This assumes an identical return every year. Real investment returns vary and can be negative, so treat the output as a planning aid rather than a forecast.
Simple interest pays only on the original principal. Ten thousand at 6% simple pays 600 a year — 18,000 over thirty years.
Compound interest folds each payment back into the balance, so the next period pays on the larger total. The same deposit compounded monthly earns over 50,000 in thirty years. That extra 32,000 is entirely interest on interest.
The gap is invisible early on. After one year it is a few dollars; after ten it is still modest. It accelerates past twenty years, which is why compounding curves look like a hockey stick.
Ten thousand at 6% for ten years: 17,908 compounded annually, 18,061 semiannually, 18,140 quarterly, 18,194 monthly.
Annual to monthly is a difference of 286, about 1.6%. Raising the rate from 6% to 7% over the same period adds about 1,780. Rate and time are far bigger levers than frequency.
Shrink the period toward zero and you reach continuous compounding, capped at principal × e^(rate × years). At 6% over ten years that is e^0.6 ≈ 1.822 — barely above the monthly figure.
Divide 72 by the annual return for a rough doubling time: twelve years at 6%, nine at 8%, six at 12%.
The approximation is accurate to under a percent between roughly 6% and 10%. It drifts at the extremes — at 2% the true answer is 35 years while the rule says 36.
The exact expression is log(2) ÷ log(1 + rate). Seventy-two is used because it divides cleanly by 2, 3, 4, 6, 8, 9 and 12, which makes the mental arithmetic easy.
A lump sum compounds for the entire term. Each monthly contribution compounds only for the time remaining after it lands — the final month's deposit earns almost nothing.
So contributing 300 a month for thirty years (108,000 total) ends up well below depositing 108,000 on day one, even at an identical rate.
That is why this calculator simulates the balance month by month rather than using a closed-form expression: every deposit has a different remaining horizon, and no single formula captures that.
Interest income is taxed. Korea withholds 15.4% (14% income tax plus 1.4% local surtax), so 50,000 of gross interest nets about 42,300. Rates and treatment differ by country and product.
Inflation erodes more quietly. Three percent a year for twenty years cuts purchasing power to roughly 55%. A 5% nominal return against 3% inflation is a real return of about 2%.
For long horizons, reading the result in real terms produces steadier decisions. What 300,000 in thirty years is worth today is usually the question you actually have.
It assumes an identical return every year. Real returns vary and go negative, and for the same average return, higher volatility produces a lower ending balance — a drag the arithmetic here does not show.
It does not model the possibility of losing principal. Deposits are protected up to insurance limits; investments are not.
It does not subtract fees. A 0.5% annual expense ratio consumes more than 10% of the final balance over thirty years, so it is more realistic to deduct fees from the return you enter.
Treat the output as "here is what these assumptions imply", not as a forecast.
For a lump sum: final = principal × (1 + rate ÷ n)^(n × years), where n is the number of compounding periods per year. Once you add regular contributions, each deposit compounds for a different remaining period, so this calculator simulates the balance month by month instead of using a single closed-form formula.
Very little over short periods, and a great deal over long ones. $10,000 at 6% for 30 years earns $18,000 in simple interest but over $50,000 compounded monthly. The gap is entirely interest earning interest.
Divide 72 by your annual return for a quick estimate. At 4% that is roughly 18 years, at 6% about 12 years, and at 10% about 7 years. Adjust the years field here for an exact figure.
Whichever you pick in the top bar. The math is identical for every currency — switching it changes only how amounts are displayed, not the numbers. No exchange-rate conversion is applied.
The rate you enter is applied once to total gains at the end of the horizon. Leave it blank for pre-tax figures. Products taxed annually rather than at maturity will do slightly worse than this estimate.
What this tool bases its numbers on, and how far those numbers go.
Lump sum: final = principal × (1 + rate ÷ n)^(n × years). Regular contributions are simulated month by month because each deposit has a different remaining horizon. After tax = gains × (1 − tax rate); real value = nominal ÷ (1 + inflation)^years.10,000 at 6% compounded monthly for 10 years: 10,000 × (1 + 0.06 ÷ 12)^120 ≈ 18,194 (simple interest would give 16,000).