Future Value
£300,850.72
£130,000.00
£170,850.72
131%
of contributions
Reaching that number depends on the contribution actually happening
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In 20 years, your £10,000.00 initial investment with £500.00/month contributions at 7% interest will grow to £300,850.72
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| 1 | £6,000.00 | £919.19 | £16,919.19 |
| 2 | £12,000.00 | £2,338.58 | £24,338.58 |
| 3 | £18,000.00 | £4,294.31 | £32,294.31 |
| 4 | £24,000.00 | £6,825.16 | £40,825.16 |
| 5 | £30,000.00 | £9,972.70 | £49,972.70 |
| 6 | £36,000.00 | £13,781.53 | £59,781.53 |
| 7 | £42,000.00 | £18,299.43 | £70,299.43 |
| 8 | £48,000.00 | £23,577.68 | £81,577.68 |
| 9 | £54,000.00 | £29,671.22 | £93,671.22 |
| 10 | £60,000.00 | £36,639.02 | £106,639.02 |
| ... | |||
| 15 | £90,000.00 | £86,970.62 | £186,970.62 |
| ... | |||
| 20 | £120,000.00 | £170,850.72 | £300,850.72 |
See how starting at different ages affects your final balance (assuming retirement at 65):
Start at age 25
£1,475,520.81
40 years
Start at age 35
£691,150.47
30 years
Start at age 45
£300,850.72
20 years
Start at age 55
£106,639.02
10 years
How this calculator works
Two separate sums, added together. Here is exactly what the code does with the numbers you type in.
The formula
FV = P × (1 + r/n)^(n×t) + C × [ ((1 + r/12)^(12×t) − 1) ÷ (r/12) ]- FV
- Future value — the headline figure, rounded to the nearest cent or penny
- P
- Initial investment (the lump sum you start with)
- C
- Monthly contribution, paid at the end of each month
- r
- Annual rate as a decimal — 7% is entered as 7 and used as 0.07
- n
- Compounding periods per year: 1, 2, 4, 12 or 365, from the dropdown
- t
- Term in whole years — the field is parsed as an integer, so 20.5 becomes 20
Total contributed is calculated separately and simply: P + (C × 12 × t). Interest earned is future value minus that total, so it absorbs every rounding difference between the two halves. If the rate is 0 — or the field is momentarily blank while you type — the contribution term would divide by zero, so the code substitutes the closed form C × 12 × t instead, which is money in a jar earning nothing.
The first half of the formula grows your opening lump sum. The second half grows the stream of monthly payments, where each contribution compounds only for the months remaining after it lands. Add the two and you have the future value. Subtract everything you actually paid in and you have the interest. That is the whole model — there is no third term hiding anywhere.
The compounding-frequency dropdown only touches the first half. Your contributions are always compounded monthly, at r/12, whichever option you pick. That is a deliberate simplification: a monthly payment schedule and a daily compounding schedule do not line up, and the closed-form annuity used here assumes one payment per compounding period. In practice it changes very little. On a $10,000 opening balance at 7% over 20 years, the lump-sum half is $38,697 if it compounds annually and $40,547 if it compounds daily — roughly $1,850 apart, against a total that runs past $300,000. The rate you assume and the number of years you leave it alone do almost all of the work.
Contributions are treated as an ordinary annuity, meaning each one arrives at the close of its month and earns nothing during that month. The very last payment earns nothing at all. If you actually transfer money on the 1st, every payment picks up an extra month of growth and your real balance ends up slightly higher than the calculator shows — about $1,500 higher in the twenty-year example below. The tool errs low rather than high, which is the right direction for a projection to be wrong in.
One result tile is easy to misread. The interest ratio divides interest earned by the total you contributed, not by the final balance, so it routinely exceeds 100%. A ratio of 131% means every dollar you paid in was joined by another $1.31 of growth. It is not saying that 131% of your pot is interest, which would be impossible.
A worked example
The calculator's own default inputs, run all the way through in US dollars.
$10,000 up front, $500 a month, 7% for 20 years
Worked example- Initial investment (P)
- $10,000
- Monthly contribution (C)
- $500
- Annual rate (r)
- 7% → 0.07
- Compounding (n)
- Monthly → 12
- Term (t)
- 20 years → 240 months
- Growth factor (1 + 0.07/12)^240
- 4.038739
- Lump sum: $10,000 × 4.038739
- $40,387.39
- Annuity factor: (4.038739 − 1) ÷ 0.0058333
- 520.9267
- Contributions: $500 × 520.9267
- $260,463.33
- Total paid in: $10,000 + ($500 × 240)
- $130,000
Interest earned is $300,850.72 − $130,000 = $170,850.72, and the interest ratio tile shows 131%. Note where the money comes from: the $10,000 lump sum contributes about $40,000 of the final total, while the monthly habit contributes about $260,000. For most people this calculator is really a contributions calculator with an interest rate attached.
Now change one input. Leave everything else alone and drop the rate from 7% to 4%, and the same $130,000 of contributions produces roughly $205,600 instead of $300,851 — a $95,000 swing from three percentage points. Change the compounding frequency from monthly to daily instead and you gain around $160. That asymmetry is the single most useful thing this page can tell you: argue about the rate, not about the dropdown.
Time behaves the same way. Ten years at these inputs lands at about $106,600. The second decade, on identical contributions, adds roughly $194,000 — just over twice what the first decade managed, because the balance doing the compounding is far larger by then. This is why the year-by-year table looks almost flat at the start and then bends sharply: nothing changes in the maths, the base just gets bigger.
How to read your result
A projection is only as good as the rate you fed it. Three checks before you trust the number.
First: is the rate one you can actually get? If the money is going into a deposit account, the honest input is the APY or AER printed on your own account, and the averages below are sobering. If it is going into invested markets, there is no single defensible number — which is why the right move is to run the calculator twice, once optimistically and once with a rate two or three points lower, and read the gap as your margin of error.
Second: will the contribution survive contact with your budget? The maths assumes the monthly amount goes in every single month for the whole term. That assumption, not the interest rate, is where most projections break. Americans saved 2.7% of disposable income in June 2026; a plan requiring far more than you have historically managed is a plan you will abandon in month seven.
Third: does it beat inflation? A 7% nominal return against US inflation of 3.5% is a real return of about 3.4%. Run the calculator again at that real rate and the twenty-year example lands near $191,000 in today's money rather than $300,851 — the same plan, honestly labelled. One month's CPI print is not a long-run inflation assumption, but it is a far better sanity check than ignoring inflation entirely.
0.38%
US national average savings account rate
July 2026. The average across all FDIC-insured institutions, dragged down by large branch banks — high-yield online accounts pay considerably more.
1.68%
US national average 12-month CD rate
July 2026. More than four times the average savings rate, but the money is locked up for the term.
1.65%
UK average rate actually paid on instant-access balances
June 2026, effective rate across the existing stock of household sight deposits. New fixed-term deposits averaged 4.30% in the same month — the gap is what loyalty to an old account costs.
3.5%
US consumer price inflation
12 months to June 2026, CPI-U, not seasonally adjusted. Core inflation was 2.6%. Any nominal rate below this is losing buying power.
2.6%
UK consumer price inflation
12 months to June 2026, CPI. CPIH, the ONS's preferred broader measure, rose 2.8% over the same period.
Source: Office for National Statistics
2.7%
US personal saving rate
June 2026, saving as a share of disposable personal income. A national accounts aggregate, not a survey — but a useful reality check on the contribution you just typed in.
Source: US Bureau of Economic Analysis
So what do you do with the number? If the projection is comfortably ahead of the goal it was built for, the useful lever is usually the contribution rather than chasing a higher rate, because the contribution is the input you actually control. If it falls short, the order to try things in is: extend the term, raise the monthly amount, then — and only with a clear head about the risk you are taking on — reconsider where the money is held. Moving an emergency fund into something volatile to chase an extra point of return is how people end up selling at the worst possible moment.
And before any of that, check the debt side. If you are carrying a revolving credit card balance, the rate working against you there is almost certainly higher than any rate you can reliably earn, and clearing it is the highest guaranteed return available to you. The credit card payoff calculator and the debt avalanche calculator run that side of the arithmetic.
What this calculator does not account for
Every projection tool makes simplifications. These are ours, stated plainly.
It has no idea what inflation is
The output is nominal. A projected balance twenty years out is denominated in twenty-years-from-now money, and prices will have moved in the meantime. Nothing in the code deflates the result.
It has no idea what tax is
No wrapper, no jurisdiction, no marginal rate. A tax-sheltered retirement account and a taxable brokerage produce identical numbers here, which in reality they never do.
It has no idea what fees are
Platform fees, fund expense ratios and advice charges are all absent. They reduce your effective rate every single year, so they compound against you on the same curve returns compound for you.
The rate never changes and never wobbles
One constant rate is applied to every period. Real deposit rates move whenever the central bank moves, and real market returns arrive as a jagged sequence of good and bad years. Two portfolios with the same average return but different ordering do not end up in the same place once you are also paying money in.
The compounding frequency only applies to the lump sum
Choosing daily or quarterly changes how your initial investment grows. The contribution stream is always compounded monthly at r/12 because the closed-form annuity assumes one payment per compounding period. The difference is small, but it is a real simplification and you should know it is there.
Contributions are assumed to arrive at the end of each month
An ordinary annuity. Paying on the 1st instead would produce a slightly higher balance than the calculator shows. The error is in your favour, but it is still an error.
The contribution never changes
No annual uprating, no pay-rise increase, no missed months, no lump-sum windfall. One number, repeated for the entire term.
Whole years only, and no withdrawals
The term field is parsed as an integer, so 20.5 becomes 20. There is no way to model taking money out partway through, and the year-by-year table stops at 50 rows even when the headline figure keeps going.
It assumes the money is actually there and stays there
No allowance for an institution failing, and no currency conversion — one currency symbol throughout, taken from your locale. In the US, FDIC deposit insurance covers at least $250,000 per depositor per insured bank; in the UK, FSCS protection has covered £120,000 per person per firm since 1 December 2025. Balances above those lines are not automatically protected.
It is a projection, not a promise
The output is arithmetic performed on assumptions you supplied. Change the rate by two points and the twenty-year answer changes by tens of thousands. Treat the result as a range, not a figure.
None of this makes the tool useless. It makes it a clean piece of arithmetic rather than a forecast, and knowing which one you are holding is the difference between a plan and a wish.
Frequently asked questions
What annual rate should I put in?
Use a rate you can actually evidence. If the money is going into a deposit account, that is the stated APY or AER on your own account — the FDIC put the national average US savings rate at just 0.38% in July 2026, and a 12-month CD at 1.68%. If it is going into invested markets, no honest single number exists, because returns are not a straight line. Whatever you choose, run the calculator a second time with a rate two or three points lower and treat that as the pessimistic case.
Does the compounding frequency dropdown actually matter?
Far less than people expect, and in this calculator it only touches the opening lump sum. On $10,000 at 7% over 20 years, the lump-sum half comes to $38,697 compounding annually and $40,547 compounding daily — about $1,850 apart. Your monthly contributions always compound monthly regardless of what the dropdown says. The rate and the number of years move the answer by orders of magnitude more.
Why is the interest ratio over 100%?
Because the tile divides interest earned by the total you contributed, not by the final balance. In the worked example above, $130,000 of contributions produced $170,851 of interest, so the ratio reads 131% — for every dollar paid in, the account handed back roughly another $1.31. Interest as a share of the final pot in that same example is about 57%, which is a different and smaller-looking number.
Does this account for inflation?
No. Every figure the calculator produces is nominal — future currency, not today's buying power. US consumer prices rose 3.5% in the 12 months to June 2026 and UK consumer prices rose 2.6%. If you want a rough answer in today's money, subtract your inflation assumption from your growth rate and run the calculator again on that lower, real rate.
Does it account for tax?
No. The calculator has no concept of a tax wrapper, a tax rate or a jurisdiction. Money compounding inside a Roth IRA, a 401(k), a UK ISA or a pension behaves very differently from the same money in a taxable brokerage or an ordinary savings account, where interest, dividends and gains may be taxed each year and drag the effective rate down. Reduce your input rate to reflect tax if the account is taxable.
Does it account for fees?
No. Platform charges, fund expense ratios, ongoing charge figures and advice fees are all missing. They come off the growth rate directly, and over decades they compound against you exactly as returns compound for you. If your fund charges 0.5% a year and you expect 7%, enter 6.5%.
What is the Rule of 72 and does it apply here?
Divide 72 by your annual rate for a rough number of years to double a lump sum: at 8%, about nine years. It is a mental shortcut for the lump-sum half of this calculation only. It says nothing useful about the contribution stream, which is the part that dominates most people's result.
Why does the calculator assume contributions land at the end of each month?
It uses the standard ordinary-annuity formula, where each payment arrives at the close of its month and therefore earns nothing during that month. If you actually pay on the 1st, every contribution picks up one extra month of growth — worth roughly $1,500 across the 20-year example above. The calculator is deliberately a little conservative rather than a little optimistic.
What if I stop contributing halfway through, or increase the amount later?
The calculator cannot model that. It assumes one fixed monthly amount from the first month to the last, never raised for a pay rise, never paused for a redundancy or a new baby. The workaround is to run it twice: once for the first phase, then again using that ending balance as the initial investment for the second phase with the new contribution.
Is compound interest the same as APY or AER?
APY (US) and AER (UK) are the annualised rates a provider must quote after accounting for how often it compounds, so they already fold the frequency in. If you enter an APY or AER into this calculator and then also select daily compounding, you are compounding it twice and slightly overstating the result. Where possible, enter the quoted APY/AER and leave the frequency on annually.
Does the same maths work against me on debt?
Yes, and that is the uncomfortable half of the idea. Interest on a credit card compounds on the balance you carry, so a debt left revolving grows on the same curve your savings do. Where you hold both, clearing high-rate debt usually beats saving at deposit rates — iBudget's credit card payoff and debt avalanche calculators run that side of the arithmetic.
Why does the 'start at age' panel disagree with my compounding frequency?
That panel is a separate illustration and always compounds monthly, whatever the dropdown is set to. It also keeps your initial investment and monthly contribution fixed while changing only the number of years to age 65, so it isolates the effect of time rather than modelling four realistic life paths.
Learn the ideas behind the number
Read next
- Compound Interest Explained: Your Money's Best FriendThe mechanism in plain English, and why time in the market beats the size of the deposit.
- How to build a savings plan you actually stick toTurning a projected balance into a monthly amount with a date attached.
- How much emergency fund do I need?Work out the buffer that should exist before any of this money gets locked away.
- Where to keep your emergency fund in the UKEasy-access, cash ISA or Premium Bonds — including FSCS limits and access speeds.
- Revenge saving: the aggressive saving trendWhat happens when people push the contribution line to 40-60% of income, and where it goes wrong.
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