How investments compound
Your returns are reinvested and go on to earn their own returns. Combined with steady contributions, this compounding is what builds wealth over years and decades.
The formula
where P is the initial amount, C the monthly contribution, i the monthly return, and m the number of months.
Frequently asked questions
How does the investment calculator work?
It grows your initial amount and each monthly contribution at your expected annual return, compounded monthly, to estimate the value at the end of your time horizon.
What return rate should I use?
Use a realistic long-term average for your strategy. Broad stock-market returns have historically averaged around 7–10% before inflation, but past performance does not guarantee future results.
Does this include inflation?
No. The figure is a nominal projection. To see today’s buying power, run the result through the Inflation Calculator.
Projections only, not investment advice.