Compound & CAGR Calculator
Track compound interest effects and annualized growth rates for your goals.
Try the calculator
Run the numbers yourself with the inputs below.
Overview
The Compound & CAGR Calculator projects how a starting balance and recurring contributions grow when reinvested at a fixed annual return. It is useful for setting realistic long-term savings targets and understanding the impact of time on a portfolio.
How it works
FV = P × (1 + r/12)^(12n) + C × ((1 + r/12)^(12n) − 1) / (r/12) × (1 + r/12)P is the initial principal, C is the monthly contribution, r is the annual return rate, and n is the number of years. Returns are compounded monthly and contributions are added at the start of each month.
Worked example
You start with 10,000, add 500 every month, and earn an average annual return of 7% over 20 years.
= Total invested is 10,000 + 500 × 240 = 130,000. Future value is roughly 299,000, of which about 169,000 is interest earned through compounding.
When to use it
- Estimate how long it will take to reach a retirement or savings goal
- Compare the effect of different contribution rates or time horizons
- See how higher expected returns translate into a final balance
Frequently asked questions
What return rate should I assume?
A common reference for diversified equity portfolios is 6–8% per year nominal. Pick a rate that matches the asset mix you actually plan to hold and consider running a more conservative scenario as well.
Does it account for inflation or taxes?
No. The result is a nominal pre-tax projection. Subtract expected inflation to estimate purchasing power and apply your tax rate to taxable accounts for an after-tax view.
Why is the result so sensitive to small changes in the rate?
Compounding is exponential. Over decades, a one-percentage-point difference in annual return can change the final balance by a meaningful percentage of the total.