What return rate should I use?

US stocks have returned roughly 10% a year nominally over the long run, or about 7% after inflation. Using 7% gives you an answer in today's purchasing power, which is usually the more useful figure. Bonds and cash return considerably less, so weight your assumption to how the money is actually invested.

Why does the growth accelerate so sharply later on?

Because returns compound on returns. In the early years your balance is mostly the money you put in, so growth is small. Decades later the returns themselves are generating returns, and the annual gain can exceed your yearly contributions many times over. This is why starting early beats contributing more later.

Does this account for inflation?

Not directly. If you enter a real return — around 7% for stocks rather than 10% — the result is roughly in today's dollars. Enter a nominal return and the final number will look larger than its actual future purchasing power.

What does the contribution increase field do?

It raises your monthly deposit by that percentage each year, modeling the fact that most people can save more as their income grows. Even a 2% annual increase compounds into a meaningfully larger final balance.

Does it include taxes and fees?

No. In a taxable brokerage account, dividends and realized gains are taxed along the way. Fund expense ratios also reduce returns — a 1% fee on a 7% return costs you roughly a seventh of your growth over decades. Subtract fees from your assumed rate for a more honest projection.

Compound Interest Calculator

See how monthly contributions and compound growth build over time, including how much of your final balance comes from deposits versus investment returns.

By StatesideCalc EditorialLast verified July 26, 2026

Starting amount

Monthly contribution

Annual return

US stocks have averaged roughly 7% after inflation, long term.

Years

yrs

Contribution increase

Annual raise applied to your deposit.

Balance by year

What the chart actually shows

Enter your numbers and look at the bar chart. For the first several years the bars grow in a nearly straight line — that is your own deposits stacking up. Then the curve starts to bend upward, and by the end it is climbing steeply.

Nothing changed in your behavior. What changed is that the returns became large enough to generate meaningful returns of their own.

The result panel shows this directly as the share of the final balance that came from growth rather than deposits. Over 10 years that share is modest. Over 30, growth typically exceeds everything you contributed.

Time is the input that matters most

Two savers, both putting away $500 a month at 7%:

Starts at 25, stops at 35. Contributes $60,000 over ten years, then never adds another dollar.
Starts at 35, contributes until 65. Puts in $180,000 over thirty years.

At 65 they end up in roughly the same place. The first saver contributed a third as much and matched the result, purely because that money had thirty extra years to compound.

This is the least intuitive and most important fact in personal finance: the first dollars you save are worth several times the last ones. No investment selection recovers a decade of lost compounding.

Choose your rate honestly

The rate is the assumption doing the most work, so be deliberate about it.

7% — a reasonable long-run real return for a stock-heavy portfolio, giving an answer in today’s purchasing power.
10% — the long-run nominal average for US stocks. Your final number will be larger but worth less than it looks.
4–5% — appropriate for a balanced portfolio holding bonds.
Subtract your fees. A fund charging 0.7% turns a 7% return into 6.3%. Over thirty years that difference is enormous.

Where this simplification bites

Real markets do not deliver a steady percentage. They deliver +22%, then −9%, then +6%. The final balance depends partly on the order those returns arrive in, which matters a great deal near retirement when a bad year hits a large balance.

So treat this as a tool for comparing scenarios — what happens if I add $200 a month, or wait five years — rather than a prediction of any specific number.

Where to put it first

The order that usually wins: capture your full 401(k) employer match, clear high-interest credit card debt, then invest beyond the match. A 50% match and a 24% APR both beat a 7% expected return, and they beat it with certainty.

How this is calculated

Simulated month by month: interest = balance × (annual rate ÷ 12) balance = balance + interest + monthly contribution Contributions optionally increase each year, tracking your raises. Growth share = total interest ÷ final balance

Frequently asked questions

What return rate should I use?: US stocks have returned roughly 10% a year nominally over the long run, or about 7% after inflation. Using 7% gives you an answer in today's purchasing power, which is usually the more useful figure. Bonds and cash return considerably less, so weight your assumption to how the money is actually invested.
Why does the growth accelerate so sharply later on?: Because returns compound on returns. In the early years your balance is mostly the money you put in, so growth is small. Decades later the returns themselves are generating returns, and the annual gain can exceed your yearly contributions many times over. This is why starting early beats contributing more later.
Does this account for inflation?: Not directly. If you enter a real return — around 7% for stocks rather than 10% — the result is roughly in today's dollars. Enter a nominal return and the final number will look larger than its actual future purchasing power.
What does the contribution increase field do?: It raises your monthly deposit by that percentage each year, modeling the fact that most people can save more as their income grows. Even a 2% annual increase compounds into a meaningfully larger final balance.
Does it include taxes and fees?: No. In a taxable brokerage account, dividends and realized gains are taxed along the way. Fund expense ratios also reduce returns — a 1% fee on a 7% return costs you roughly a seventh of your growth over decades. Subtract fees from your assumed rate for a more honest projection.