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Three people invest the same $300 a month at the same 7 percent return. One starts at 25, one at 35, one at 45. By 65, the gap between them isn't small.

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Total interest -
Return multiple -

Estimates only. Not financial advice.

Chris Terry
Calculator by Chris Terry, Owner and Editor
Last updated July 18, 2026

The scenario ladder: same $300 a month, three start ages

Start ageYears investedValue at 65
2540$642,000
3530$294,000
4520$123,000

Ten fewer years at the start costs more than ten years of contributions would suggest; the 25-year-old's balance is more than double the 35-year-old's, not because they contributed twice as much, but because the earliest dollars had decades longer to compound. If you're starting later, the honest fix isn't giving up on the exercise, it's raising the monthly number in the calculator above until the ending balance looks like something you can live with.

What compounding actually means

Compound interest is interest paid on interest already earned, not just on the original deposit. Each period, the return gets added to the balance, and the next period earns a return on that larger number. The Securities and Exchange Commission's investor education site describes it as earning interest on both the money you save and the interest that money has already earned, a feedback loop that looks flat for a long time and then visibly steepens.

Time beats timing. The compounding-frequency dropdown above changes the result only slightly. Starting years earlier changes it enormously.

The formula behind both numbers

A lump sum grows as FV = P(1 + i)^N, where P is the starting amount, i the periodic rate, N the number of periods. Regular contributions grow as PMT times ((1 + i)^N - 1) / i. Take $10,000 to start, $300 a month, 7 percent annual compounded monthly, over 20 years: i is 0.07/12, about 0.005833, N is 240. The lump sum alone reaches roughly $40,300; the contributions alone reach about $156,200. Add them for a future value near $196,500, against $82,000 actually put in, meaning about $114,500 of the total is growth rather than deposits.

What return number to actually use

A fixed return like 7 percent is a planning assumption, not a promise. The long-run U.S. stock market average is often cited around 7 percent after inflation, but that average smooths over years with sharp losses and years with outsized gains. Use a conservative number in the calculator above rather than the best year you remember reading about, and treat the compounding-frequency choice as a minor adjustment next to how much you contribute and for how long.

Sources: SEC Investor.gov on compound interest, SEC Investor.gov investing basics.

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FAQs

I'm starting at 45 instead of 25. Is it even worth bothering with regular contributions?

Yes, though the ending balance will be smaller than someone who started decades earlier for the same monthly amount. The response is usually to raise the monthly contribution rather than assume it's not worth doing; run your own numbers in the calculator above at a few different contribution levels to see the tradeoff directly.

Does it matter whether I compound monthly or annually if I'm investing in a normal brokerage account?

For a typical stock or fund investment, returns aren't credited on a fixed compounding schedule the way a savings account might advertise, so the compounding-frequency dropdown here is more useful for comparing how a bank product's stated frequency affects the math than for modeling market returns precisely.

Why does the calculator's future value assume the same return every single year?

A single fixed rate is a planning simplification, not a forecast. Real returns vary year to year and can be negative in some years even when the long-run average is positive, so treat the output as a rough planning target rather than a guaranteed number.