See how a starting balance, monthly contributions, and a long-run return rate compound over decades. Useful for setting realistic savings goals and understanding the cost of starting late.
What this calculator does
Three inputs, one chart:
- Starting balance — what you have invested today
- Monthly contribution — how much you'll add each month
- Annual return rate — your expected long-run rate (default 7% — long-run Australian/global share average)
It plots the projected balance over the time horizon you choose, and breaks the final number into:
- Total contributions (what you put in)
- Compound growth (what the market did for you)
Using the calculator
- Go to Calculators in the sidebar and select Compound Interest.
- Enter starting balance, monthly contribution, return rate, and years.
- The chart updates instantly.
Why time in the market matters
Compounding rewards starting early, dramatically. Two simple examples at 7% per year:
- Start at 25, contribute $500/month for 10 years, then stop: ~$1.4M by age 65 from $60K of contributions
- Start at 35, contribute $500/month every year for 30 years: ~$610K by age 65 from $180K of contributions
The first person contributed less ($60K vs $180K) but ended up with more than twice as much, because the early money had longer to compound. Time matters more than the amount.
Realistic return rates
The default 7% is the long-run nominal return for diversified Australian and global equities. Adjust based on your investment mix:
- Conservative (cash + bonds): 3-4%
- Balanced (60/40): 5-6%
- Growth (mostly equities): 6-8%
- High growth / pure equities: 7-9%
These are nominal rates (before inflation). For real purchasing power growth, subtract ~2.5% inflation.
Note: Past performance is not a reliable indicator of future returns. This calculator is for educational purposes only and not financial advice.