The power of compounding
Compounding means returns earn returns of their own. The longer the horizon, the larger the share of the final value that comes from returns rather than deposits.
Final value = capital × (1 + r)n + deposit × ((1 + r)n − 1) ÷ r, where r is the monthly return and n the number of months.
Frequently asked questions
What return is realistic?
Historically: deposits 3–5%, money market funds 4–6%, bonds 6–8%, long-term stocks 8–12% a year. Past performance does not guarantee future results.
Is inflation included?
No. For a real value, subtract expected inflation (about 2–4% a year) from the return.
What is the rule of 72?
Divide 72 by the annual return to estimate how many years it takes money to double. For example 72 ÷ 8% = 9 years.
Results are simulations to help planning and may differ from official calculations by agencies, employers or banks. Last updated 2026-11-02.