The Power of Compounding
Explore what time, regular contributions and investment returns could add up to.
How to use it Set your starting capital, contribution amount, assumed annual return and years. Choose monthly or annual contributions, made at the beginning or end of each period.
Illustrative portfolio value
20 years · 8% a year
- Money contributed
- £70,000.00
- Illustrative investment gain
- +£118,859.34
- Contribution schedule
- £250.00 monthly
- Contribution timing
- End of each period
Year-by-year figures
| Year | Contributed | Value | Gain / loss |
|---|---|---|---|
| 0 | 10,000 | 10,000 | 0 |
| 1 | 13,000 | 13,908.47 | +908.47 |
| 2 | 16,000 | 18,129.62 | +2,129.62 |
| 3 | 19,000 | 22,688.46 | +3,688.46 |
| 4 | 22,000 | 27,612.01 | +5,612.01 |
| 5 | 25,000 | 32,929.44 | +7,929.44 |
| 6 | 28,000 | 38,672.27 | +10,672.27 |
| 7 | 31,000 | 44,874.52 | +13,874.52 |
| 8 | 34,000 | 51,572.96 | +17,572.96 |
| 9 | 37,000 | 58,807.27 | +21,807.27 |
| 10 | 40,000 | 66,620.32 | +26,620.32 |
| 11 | 43,000 | 75,058.42 | +32,058.42 |
| 12 | 46,000 | 84,171.56 | +38,171.56 |
| 13 | 49,000 | 94,013.76 | +45,013.76 |
| 14 | 52,000 | 104,643.33 | +52,643.33 |
| 15 | 55,000 | 116,123.27 | +61,123.27 |
| 16 | 58,000 | 128,521.6 | +70,521.6 |
| 17 | 61,000 | 141,911.8 | +80,911.8 |
| 18 | 64,000 | 156,373.21 | +92,373.21 |
| 19 | 67,000 | 171,991.54 | +104,991.54 |
| 20 | 70,000 | 188,859.34 | +118,859.34 |
Fixed-return illustration. Fees, tax and inflation are excluded.
Why it matters
See how much comes from your contributions and how much comes from growth.
With no further contributions, £10,000 growing at a fixed 8% effective annual return becomes £21,589.25 after ten years. This is an illustration, before fees, tax and inflation—not an expected outcome.
How it's calculated
End-period contributions: next balance = balance × (1 + rate) + contribution
Start-period contributions: next balance = (balance + contribution) × (1 + rate)
Monthly periods use the twelfth root of the annual growth factor, not the annual return divided by twelve. Annual contributions use one period per year. “Money contributed” includes your initial capital. The model also accepts negative return assumptions.
Assumptions & limitations
Fixed nominal effective annual returns, with no volatility, withdrawals, fees, taxes or inflation. Investment returns are not guaranteed interest. Actual returns vary and can be negative; the order of returns matters when contributions or withdrawals occur.