How the math works
Each month, your balance grows by your expected annual return divided by 12, and then your monthly contribution is added:
New Value = Value + (Value × Annual Return / 12) + Monthly Contribution
If you set a yearly contribution increase, your contribution compounds at that rate — useful for modeling salary growth. The optional inflation rate deflates the final value into today's purchasing power so you can compare future amounts with what things cost now.
This is exactly how the Wealth Path app projects your portfolio in predictions like Portfolio Milestone, Time to Double and Worth by Age— except the app runs it per asset, each with its own expected return and contribution, and adds optional tax simulation.
Frequently Asked Questions
How does this compound interest calculator work?
It runs a month-by-month simulation: each month your balance grows by the annual return divided by 12, then your monthly contribution is added. This is the same convention the Wealth Path app uses for its portfolio predictions, so results match what the app would project.
Why compound monthly instead of yearly?
Most people invest monthly, and returns accrue continuously. Monthly compounding of contributions gives a more realistic projection than annual formulas, especially over long horizons.
What does the inflation option do?
It shows your projected value deflated into today’s purchasing power, so you can see what the future amount is actually worth. The nominal projection is unchanged.
Track your real portfolio, not a hypothetical
Wealth Path runs this math on your actual assets — each with its own return, contributions, and currency — and turns it into dates: when you hit your milestone, when you can retire, when you reach Coast FIRE.
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The information and calculations provided are for informational and educational purposes only and should not be considered financial, investment, or professional advice. Projections are hypothetical, based on assumptions that may not reflect actual market conditions. Past performance does not guarantee future results, and all investments carry risk of loss. Consult a qualified financial professional before making financial decisions.