See what a steady return and time do to your savings, year by year. Updates as you type.
Results update as you type.
| Year | Contributed | Interest | Balance |
|---|
Interest earns interest. In year one you earn a return on your deposit; in year two, on the deposit and last year's interest. The effect is small early and large late, which is why the interest column grows faster every year.
Contributions are added at the end of each month. The annual rate is converted to the matching monthly rate for the compounding you choose, (1 + r/n)^(n/12) − 1, so with yearly compounding and nothing added it matches the textbook P × (1 + r)^t exactly.
Divide 72 by the annual rate for a rough doubling time: about 12 years at 6%, 9 years at 8%. Real returns vary, and fees and tax reduce them — treat this as an illustration, not a forecast.
Compounded yearly with nothing added, about $16,289. Compounded monthly, about $16,470.
Less than people think. At 6% a year, monthly compounding works out to about 6.17% a year instead of 6%. The rate and the time invested matter far more.