See how your money grows over time with the power of compounding. Add monthly contributions to maximise your results.
When monthly contributions are added to a compounding balance, you're computing the future value of an annuity. The formula is FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) ÷ (r/n)]. Most real-world plans — retirement, house deposit, education funds — use this, not lump-sum compounding.
Pure lump-sum compounding is a textbook scenario. Real life is monthly contributions: payroll deductions into a 401(k) or workplace pension, standing orders into an ISA, automated transfers into a high-yield savings account. The future-value-of-annuity formula has four inputs that matter: starting principal (P), monthly contribution (PMT), annual rate (r), and time horizon in years (t), with n typically set to 12 for monthly compounding.
Two timing variants change the result by 5-10% over long horizons. An ordinary annuity (end-of-period contributions) is the standard convention and how most retirement and savings vehicles operate. An annuity due (start-of-period contributions) pays a small premium because each contribution earns one extra compounding period of growth — relevant if you pay rent-like contributions at the start of each month.
A worked example illustrates why consistency dominates contribution size: - Person A contributes $500/month for 40 years starting at age 25 (total $240k contributed) at 7% real: ends at ~$1.31M - Person B contributes $500/month for 30 years starting at age 35 (total $180k contributed) at 7% real: ends at ~$612k - Person C contributes $1,000/month for 30 years starting at age 35 (total $360k contributed) at 7% real: ends at ~$1.22M
Person C contributed 50% more than Person A and still ended with less. The first decade of compounding matters more than the last decade — this is the most under-priced insight in personal-finance arithmetic.
This calculator lets you stress-test three patterns most plans ignore: 1. Sequence-of-returns risk — a 30% market decline in years 1-3 of accumulation has minimal long-term impact; the same decline in years 28-30 is catastrophic 2. Contribution escalation — a 3% annual increase (tracking wage growth) typically lifts the 30-year terminal balance by 35-50% 3. Real vs. nominal returns — long-term plans built on 8% nominal returns with 0% inflation give wildly optimistic projections; use real returns throughout
For real-return inputs, the BLS CPI series (US) and ONS CPI series (UK) are the standard inflation references.
| Year | Balance | Interest This Year | Total Contributions |
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This calculator implements the standard compound-interest formula: A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) − 1) / (r/n)]. Region-specific tax and rate defaults are sourced directly from each country's primary government source and reviewed against the publication date below.
Last verified: May 2026.