Compound Interest Explained: How Money Grows
Compound growth means returns can earn additional returns. It is powerful over long periods, but investment returns are variable and should not be confused with a guaranteed bank interest rate.
Change the inputs and compare scenarios with the related RetirementMetric calculator.
Open the calculatorThe core relationship
Future value rises with the starting balance, contribution amount, time and return. Time is especially important because each additional year can compound prior gains.
Why monthly contributions matter
Regular contributions add new principal throughout the journey. For many households, increasing the amount invested is a more controllable lever than trying to find a higher-return investment.
Use multiple assumptions
Compare conservative, middle and optimistic return scenarios. A calculator projection is a planning tool, not a prediction of market performance.
How to use this number responsibly
Use the result as a planning range rather than a forecast. Re-run the calculation when your balance, contribution rate, debt, retirement date, tax situation or spending target changes. For investment projections, compare multiple return assumptions because future market returns are unknown.
What this calculator does not know
RetirementMetric does not know your complete tax situation, benefits, investment holdings, insurance needs or household expenses. The tools are educational estimates, not individualized investment, tax or legal advice.
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