Investment Calculator — Compound Interest & Growth Projection
Project investment growth with compound interest.
Model how a lump sum and regular contributions grow over time with compound interest. Compare nominal returns against inflation-adjusted values.
Investment details
Contributions
Contribution frequency
Growth assumptions
Expected yearly growth. Historical average for diversified shares is ~7–8% p.a.
Compounding frequency
How often interest is added to your balance. More frequent compounding means faster growth.
Results shown in
Showing actual future dollar amounts.
Used to calculate today’s dollar equivalent.
Investment Projection
Projected balance after 10 years
$106,639
≈ $90,659 in today’s purchasing power (2.5% p.a. inflation)
- Total contributions
- $70,000
- Interest earned
- $36,639
- Initial investment
- $10,000
- Return rate
- 7% p.a.
- Compounding
- Monthly
- Mode
- Nominal
Selling your investment?
Estimate capital gains tax on your projected return.
Related tools
Year-by-Year Breakdown
| Year | Opening | Contributions | Interest | Closing |
|---|---|---|---|---|
| 1 | $10,000 | $6,000 | $919 | $16,919 |
| 2 | $16,919 | $6,000 | $1,419 | $24,339 |
| 3 | $24,339 | $6,000 | $1,956 | $32,294 |
| 4 | $32,294 | $6,000 | $2,531 | $40,825 |
| 5 | $40,825 | $6,000 | $3,148 | $49,973 |
| 6 | $49,973 | $6,000 | $3,809 | $59,782 |
| 7 | $59,782 | $6,000 | $4,518 | $70,299 |
| 8 | $70,299 | $6,000 | $5,278 | $81,578 |
| 9 | $81,578 | $6,000 | $6,094 | $93,671 |
| 10 | $93,671 | $6,000 | $6,968 | $106,639 |
How the Investment Calculator Works
Why Use an Investment Calculator?
Compound interest is often called the eighth wonder of the world, but it can be hard to visualise. This calculator turns abstract percentages into concrete dollar projections, showing you exactly how your money grows year by year. It helps you compare different contribution strategies, return rate assumptions, and time horizons so you can make more confident investment decisions.
Key Concepts
Compound Interest
Earning returns on your returns. The longer you invest, the more powerful this effect becomes. A 7% return over 30 years turns $10,000 into roughly $81,165 with monthly compounding.
Contribution Frequency
How often you add money. More frequent contributions get invested sooner and start compounding earlier, though the difference is modest compared to total amounts.
Compounding Frequency
How often interest is calculated and added to your balance. Monthly compounding produces slightly more than annual, but the return rate is the bigger driver.
Real vs Nominal Returns
Nominal returns are the headline number. Real (inflation-adjusted) returns show what your future balance is actually worth in today’s purchasing power.
What $10,000 grows to over 10, 20 and 30 years
The longer the horizon, the more the interest column dominates the contributions column. Both scenarios below assume a 7% annual return compounded monthly:
| Years invested | $10,000 lump sum | + $250/month | Lump sum in today's dollars |
|---|---|---|---|
| 10 years | $20,097 | $63,368 | $15,499 |
| 20 years | $40,387 | $170,619 | $24,023 |
| 30 years | $81,165 | $386,158 | $37,235 |
Investment returns and tax
Capital gains on shares and property
When you sell an investment for more than you paid, the profit is a capital gain. Gains on assets held for over 12 months receive a 50% CGT discount. The net gain is added to your taxable income and taxed at your marginal rate. Property investors also carry state holding costs while they own — estimate the annual bill with the land tax calculator.
Dividends and franking credits
Australian company dividends often come with franking credits reflecting tax already paid at the company level. These credits reduce the additional tax you owe on the dividend income, and can sometimes produce a refund.
This is a general projection tool
This calculator does not model tax, fees, or specific asset classes. For capital gains estimates, use the CGT calculator. For superannuation-specific projections including concessional caps, use the super projection calculator, and to weigh investing against paying down a mortgage, try the invest vs offset calculator.
Frequently Asked Questions
How does compound interest work?
Compound interest means you earn returns not just on your original investment, but also on the interest already earned. Over time this creates exponential growth — often called the “snowball effect.” The longer your money compounds, the larger the gap between your contributions and your final balance.
What is a realistic annual return rate?
The long-term average return of the Australian share market (ASX 200) is roughly 8–10% p.a. including dividends, or around 6–7% after inflation. Bond and cash returns are typically lower (3–5% nominal). A diversified portfolio often falls in the 6–8% range depending on asset allocation. Past returns do not guarantee future performance.
What is the difference between nominal and real returns?
Nominal returns are the raw percentage your investment grows each year. Real returns subtract the effect of inflation, showing what your money is actually worth in today’s purchasing power. For long-term projections (10+ years), real returns give a more honest picture of your future buying power.
Does compounding frequency matter much?
More frequent compounding (e.g., monthly vs annually) produces a slightly higher effective return, because interest earned earlier in the year starts compounding sooner. However, the difference is usually modest — the return rate and time horizon have a much bigger impact on your final balance.
How are investment returns taxed in Australia?
Capital gains on investments held for more than 12 months qualify for a 50% CGT discount. Dividend income is taxed at your marginal rate, but franking credits offset tax already paid by the company. Interest income (savings accounts, bonds) is fully taxable at your marginal rate. The 'Investment returns and tax' section on this page covers the details, and our CGT Calculator handles capital gains estimates.
Should I invest a lump sum or contribute regularly?
Historically, lump-sum investing outperforms dollar-cost averaging (regular contributions) about two-thirds of the time, because markets tend to rise over time. However, regular contributions smooth out volatility and are more practical for most people who earn income over time. This calculator lets you model both approaches.
Does this calculator account for fees?
No. Investment management fees, platform fees, and brokerage costs reduce your effective return rate. To approximate fees, subtract them from your expected return rate before entering it. For example, if you expect 7% returns and pay 0.5% in fees, enter 6.5%.
How does this relate to superannuation?
Superannuation is a tax-advantaged investment vehicle with specific rules around contributions and access. This general investment calculator projects returns outside of super. For super-specific projections including concessional caps and employer contributions, use our Super Projection calculator.
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