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Money

Interest calculator

How much an investment grows with contributions, compounding, taxes, and inflation. Learn the concept.

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Annuity

A series of equal payments made at regular intervals, such as monthly contributions or yearly withdrawals.

In finance math, an annuity is any stream of level, regular payments. The same formulas value your monthly savings, a loan payment or a fixed retirement income stream.

PV = PMT × (1 − (1 + r)^−n) ÷ r ; FV = PMT × ((1 + r)^n − 1) ÷ r

Example: Funding $40,000 a year for 25 years at 5% takes about $563,758 today, even though the payments add up to $1,000,000, because the money still waiting keeps earning 5%.

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Compound interest

Interest earned on both the original amount and on interest already earned.

With compounding, your returns start earning returns of their own, so growth speeds up the longer money stays invested. Time in the market is often the biggest lever in a long-term plan.

FV = PV × (1 + r/n)^(n·t)

Example: If you invest $10,000 at 7% and leave it for 30 years, it grows to about $76,123 — $66,123 of that is interest on interest and earlier growth.

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Marginal vs. effective tax rate

Your marginal rate is the tax on your next dollar of income; your effective rate is total tax divided by income.

The marginal rate drives decisions such as whether to contribute pre-tax or do a Roth conversion, because it applies to the next dollar. The effective rate is your overall average and is always lower when brackets are progressive.

Effective rate = Total tax ÷ Income ; Marginal rate = Change in tax ÷ Change in income

Example: A single filer with $100,000 of wages in 2026 owes $13,170 of federal income tax. Their marginal rate is 22%, but their effective rate on gross income is only 13.2%.

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Inflation

The general rise in prices over time, which reduces what each dollar can buy.

Inflation means the same spending costs more each year, so a plan that ignores it will look far better than reality. The app projects your expenses with inflation and can show every result in today's dollars.

Future cost = Today's cost × (1 + i)^t ; Buying power = Amount ÷ (1 + i)^t

Example: At 3% inflation, $60,000 of yearly spending today becomes $60,000 × 1.03^25 ≈ $125,627 a year in 25 years for the same lifestyle.

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Ending balance

Future value

What money today, or a series of deposits, grows to by a future date at a given rate of return.

Future value projects how big a balance becomes after years of growth. It is how the app turns today's savings and contributions into projected balances at retirement.

FV = PV × (1 + r)^t

Example: $20,000 invested at 6% a year for 25 years grows to $20,000 × 1.06^25 ≈ $85,837.

Full entry
$53,153.79
Total contributions
$45,000.00
initial $20,000 + $25,000
Total interest

Compound interest

Interest earned on both the original amount and on interest already earned.

With compounding, your returns start earning returns of their own, so growth speeds up the longer money stays invested. Time in the market is often the biggest lever in a long-term plan.

FV = PV × (1 + r/n)^(n·t)

Example: If you invest $10,000 at 7% and leave it for 30 years, it grows to about $76,123 — $66,123 of that is interest on interest and earlier growth.

Full entry
$8,153.79
In today's dollars

Real vs. nominal

Nominal amounts are actual dollar figures; real amounts are adjusted for inflation to reflect buying power.

A nominal return or balance is the raw number; a real one strips out inflation so you can see what it actually buys. Comparing plans in real terms keeps decades-long projections honest.

Real return = (1 + nominal) ÷ (1 + inflation) − 1

Example: If your portfolio earns 7% while inflation runs 3%, your real return is 1.07 ÷ 1.03 − 1 ≈ 3.88%. Over 30 years, $100,000 grows to $761,226 on paper, which buys what about $313,615 buys today.

Full entry
$45,850.92
The scenario uses monthly or effective-annual compounding, so totals can differ slightly.

Balance by year

Compound interest

Interest earned on both the original amount and on interest already earned.

With compounding, your returns start earning returns of their own, so growth speeds up the longer money stays invested. Time in the market is often the biggest lever in a long-term plan.

FV = PV × (1 + r/n)^(n·t)

Example: If you invest $10,000 at 7% and leave it for 30 years, it grows to about $76,123 — $66,123 of that is interest on interest and earlier growth.

Full entry

Estimates only. Results are projections based on your assumptions and bundled data, not tax, legal, or investment advice.