compoundsimCompound Interest Simulator
Enter a monthly amount, a return and a time span, and see what your savings grow to, year by year.
How compound interest works with monthly contributions
What this simulator calculates
Enter an initial amount, a monthly contribution, an expected annual return and a duration. Each month the balance grows at the rate that compounds to the annual return over twelve months, and the contribution is added at month end, so it starts earning from the following month. The table lists principal, gains and total for every year or month, and the chart shows how the share of gains widens over time.
Why time matters more than the rate
Compounding is slow at first and accelerates later, because each year's gains are earned on a balance that already includes earlier gains. At a 5% return, a plan of monthly contributions earns almost five times as much in gains over 20 years as over 10 years, not twice as much. Starting earlier is usually worth more than finding a slightly higher return.
Choosing a realistic return
A fixed rate is an idealised view: real markets rise and fall every year. Broad stock indices have historically delivered mid-single-digit real returns over long periods, but any single decade can be far better or worse. Try several rates to see a range, and use the Monte Carlo page to model year-to-year variation with real index data.