How this compound interest calculator works
The model starts with your existing balance, adds a fixed contribution at each month-end and compounds growth monthly. It uses a nominal annual rate divided by twelve. The net annual input is the expected return minus the fee and tax-drag inputs. This is a planning approximation, not a simulation of tax law or daily market prices.
For a non-zero monthly rate r and n months, the ending value is P × (1 + r)^n + M × ((1 + r)^n − 1) ÷ r. P is the starting balance and M is the month-end contribution. When r is zero, the result is simply P + M × n.
What the worked example tells you
With a starting amount of 10,000 and contributions of 300 a month for ten years, your contributions total 46,000. Using a 7% gross return, 0.5% fees and 0.3% tax drag gives a 6.2% nominal net rate. The model produces about 68,260.72; with 2.5% annual inflation, that is about 53,325.17 in today’s purchasing power. These are hypothetical inputs, not promised returns.
Try reducing the return by two percentage points while leaving the saving amount unchanged. Then increase the contribution instead. Comparing those cases separates a decision you control—saving—from a market outcome you cannot control.
Fees, inflation and uncertainty
A small recurring cost can affect the final balance over a long horizon. Inflation answers a different question: how much could the future balance buy relative to today? A larger account balance can coexist with disappointing purchasing power.
Real investment returns fluctuate, contributions may stop, fees may be charged differently and taxes may depend on realized gains and account type. Negative years and withdrawals can alter the path substantially. Use several assumptions and verify the model against your product’s actual terms.
Questions readers often ask
Does this calculator include monthly deposits?
Yes. Deposits occur at the end of each month and stay fixed throughout the projection.
Is the return guaranteed?
No. A constant return is an illustrative input; market investments can lose value.
Does selecting CAD convert a USD amount?
No. Reporting currency changes the display label only. Enter all amounts in the same currency.
How are fees and taxes handled?
Annual fees and tax drag are subtracted from the return input. This simple approximation does not calculate your actual tax liability.
Keep the result in context
The calculator uses simplified assumptions. It does not retrieve market prices, personalized tax rates or lender terms. Verify important inputs and revisit the estimate when circumstances change.
Understand ETFs, index funds and mutual funds · Use the research checklist · Financial information disclaimer
Further reading: Investor.gov financial planning tools.