How does compound growth work?
Compound growth means that a balance earns a return and later returns are calculated on the accumulated balance as well as the original amount. This calculator applies a fixed nominal annual rate divided by the number of compounding periods per year. It then adds your contribution once per period, either at the end or beginning, according to your selection.
For example, a hypothetical starting balance of $1,000 growing at 5% per year with no added contributions becomes about $1,648. If contributions are included, each contribution has a different amount of time to grow. The calculator iterates period by period, applying the periodic rate and contribution timing. It reports the projected ending value, total principal and contributions, and the difference between them.
The result depends entirely on the rate and schedule you enter. It assumes a constant rate, regular equal contributions, and no withdrawals. Actual investment returns vary and can be negative; fees, taxes, inflation, contribution interruptions, and changing rates can materially alter outcomes. A nominal future amount does not show what purchasing power may be after inflation.
For a zero or negative rate, the same periodic calculation is applied; the rate must remain above negative 100% per period so the modeled balance factor is meaningful. Values are rounded for display only. Currency formatting is a label and does not convert the amounts. Compare scenarios by changing one assumption at a time, and treat every output as a hypothetical illustration rather than an expected return.
Frequently asked questions
Does the calculator predict investment returns?
No. The rate is an assumption supplied by you and is held constant for the entire scenario.
When are contributions added?
Choose beginning or end of each compounding period. Beginning contributions receive one additional period of modeled growth.
Are taxes and fees included?
No. The calculation excludes taxes, fees, inflation, withdrawals, and changes in the rate.