Compound Growth to Target Calculator

Project the future value of an investment given a starting balance, monthly contributions, an expected annual return, and a time horizon, using standard monthly compounding. Educational estimate, not financial advice.

Starting Balance ($)

Monthly Contribution ($)

Expected Annual Return (%)

Years

The formula behind the projection

Everything compounds monthly. The annual rate is divided by twelve and the years multiplied by twelve, then the starting balance and the stream of contributions are grown separately and added:

r = annual return / 100 / 12      n = years × 12
FV = P(1 + r)^n + PMT × ((1 + r)^n - 1) / r
r = 0  →  FV = P + PMT × n

Take the defaults: $10,000 to start, $500 a month, 7%, 20 years. Then r = 0.0058333, n = 240 and (1 + r)^n = 4.0387. The lump sum becomes $40,387, the contributions become $260,463, and the projection reads $300,851. You put in $130,000 of your own money, so $170,851 of that is growth.

What the inputs really mean

The return is nominal unless you make it real. 7% is a before-inflation figure, so $300,851 is what the statement says in 20 years, not what it buys. Enter about 4% to read the answer in today's money.
Contributions are assumed to land at the end of each month and never to rise. If you plan to index them to your pay, re-run the tool every few years rather than trusting one 30-year projection.
Dividing by twelve slightly favours you. 7% a year charged monthly is an effective 7.23%, because each month's growth compounds on the last.

The years box must be above zero, and the return box must be filled in - 0 is fine and simply adds the contributions up.

Frequently asked questions

How much is $500 a month worth after 20 years?

Starting from $10,000 at 7% a year, $300,851. Cut the return to 5% and the same plan lands on $232,643; stop after 10 years instead and it is $106,639.

Is the 7% return before or after inflation?

Before. US stocks have historically returned roughly 10% nominal and about 7% after inflation, so 7% here is a middling nominal assumption for a mixed portfolio. Past averages are not a forecast.

Why does total growth beat my contributions so quickly?

Because growth compounds on the whole balance while contributions are added at a flat rate. In the default run growth overtakes everything you have paid in at about year 17, and by year 20 it is $170,851 against $130,000.