How it works
Compound interest means your returns earn returns. Over long periods, growth can far exceed what you put in.
Formula
FV = P(1 + r)ⁿ + PMT × ((1 + r)ⁿ − 1) ÷ r
Example
$10,000 plus $500/month at 7% for 20 years grows to about $300,000.
Assumptions & limitations
- A constant rate of return or inflation every year.
- Excludes fees and taxes unless entered.
- Contributions are made regularly and on time.
Frequently asked questions
What return should I assume?
The US stock market has historically returned around 7% per year after inflation, but past results don't guarantee future returns.