Savings Growth Calculator
Project how your savings will grow over time with regular contributions and compound interest. Includes the Rule of 72, early vs. late start comparison, and savings account types.
Projected Growth
Growth Milestones
How to Use This Tool
- Enter your initial deposit — the lump sum you're starting with.
- Enter your planned monthly contribution.
- Enter your expected annual return rate.
- Enter the number of years you plan to save.
- Read the Total Value and check how much comes from deposits versus interest earned.
- Review the Growth Milestones list to see your projected balance at intermediate years along the way.
Formula & How It Works
Future Value of Savings
FV = P × (1+r)^n + PMT × ((1+r)^n − 1) ÷ rP is the initial deposit, PMT is the monthly contribution, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of months. The first term grows your initial lump sum; the second term accumulates the value of all your recurring contributions.
Interest Earned
Interest Earned = Future Value − (Initial Deposit + Total Contributions)The portion of your final balance that came from investment growth rather than money you personally deposited.
Practical Examples & Common Use Cases
Example 1: $5,000 start, $500/month, 7% for 20 years
Monthly rate = 7% ÷ 12 ≈ 0.5833%, n = 240 months. FV = $5,000 × (1.005833)^240 + $500 × ((1.005833)^240 − 1) ÷ 0.005833 ≈ $282,000. Total deposited = $5,000 + $120,000 = $125,000, so interest earned ≈ $157,000 — more than the contributions themselves.
Example 2: No initial deposit, $300/month, 7% for 40 years (early start)
With P = $0, PMT = $300, r ≈ 0.5833%, n = 480 months, FV ≈ $798,000 from $144,000 in total contributions — interest earned makes up over 80% of the final balance.
Example 3: Late start comparison, $600/month, 7% for 30 years
Starting 10 years later but contributing double: PMT = $600, n = 360 months, FV ≈ $681,000 from $216,000 in contributions — $117,000 less than Example 2 despite contributing $72,000 more, illustrating how time matters more than contribution size.
Frequently Asked Questions
For a diversified stock portfolio (like an S&P 500 index fund), 7% is a commonly used real (inflation-adjusted) long-term average. For nominal returns, use 10%. High-yield savings accounts offer 4–5%, CDs offer 3.5–5.5%, and balanced portfolios (60/40 stocks/bonds) typically return 5–7%. Use a lower, conservative rate — it's better to be pleasantly surprised than underprepared.
No — results are shown in nominal (today's dollar value) terms. To see real purchasing power, subtract expected inflation (typically 2–3%) from your return rate. For example, use 4% instead of 7% to see inflation-adjusted growth of a diversified stock portfolio. A "million dollars" in 30 years will only have the purchasing power of about $400,000–$500,000 in today's terms at 3% inflation.
Common guidance is to save 15–20% of your gross income for retirement (including employer matching). For shorter-term goals, save what's needed to hit your target — use this calculator to work backwards. Starting early matters enormously: $300/month at 25 produces more at retirement than $600/month starting at 35, even though you contribute half as much total.
Compound interest means earning interest on your interest, not just on your original deposit. On a $10,000 investment at 7%, simple interest would give you $700/year every year. Compound interest gives you $700 in year 1, then $749 in year 2 (7% of $10,700), growing each year. Over 30 years, compound interest produces 2.5× more than simple interest on the same investment.
No. In tax-advantaged accounts (traditional 401k, IRA) growth is tax-deferred — you pay tax when you withdraw. In Roth accounts (Roth 401k, Roth IRA), growth is tax-free in retirement. In taxable brokerage accounts, you owe tax on dividends and realized capital gains each year, which reduces effective returns. Prioritize tax-advantaged accounts to maximize compound growth.
APR (Annual Percentage Rate) is the stated interest rate without considering compounding. APY (Annual Percentage Yield) accounts for compounding frequency — daily, monthly, or annually. A savings account with 5% APR compounded daily actually yields 5.13% APY. Always compare APYs when shopping savings accounts, as they reflect the true annual return.
The impact is dramatic due to compound interest. Someone who saves $300/month from age 25 to 65 at 7% accumulates about $798,000 from $144,000 in contributions. Someone who waits until 35 and saves $600/month accumulates about $681,000 from $216,000 in contributions — less money despite contributing more, just because of the 10-year delay. Time is the most powerful variable in savings growth.
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