How this tool works
Projects how a balance grows from a starting amount, a rate and a number of years, with optional regular contributions, and shows the balance year by year.
Compounding means interest is calculated on interest already earned, so growth accelerates rather than accumulating in a straight line. The frequency matters as well as the rate: the same nominal rate compounded monthly produces slightly more than compounded annually, because each period's interest starts earning sooner. Regular contributions are treated as arriving through the period rather than all at the start, which is the conservative reading. Everything here is a projection from constant assumptions — no real investment returns the same percentage every year.
What a projection is not
- A constant rate is an assumption, not a forecast: real returns vary, and a sequence of poor early years leaves a different result from the same average arriving in a different order.
- Inflation is not deducted: the final figure is in nominal terms. At three per cent inflation, money loses roughly half its purchasing power in twenty-four years.
- Tax and charges are excluded: platform fees, fund charges and tax on gains all reduce the real outcome, and small annual percentages compound against you exactly as returns compound for you.
- Time does more work than rate: an extra decade usually outweighs an extra percentage point, which is why the year-by-year table is worth reading rather than just the total.