Separate deposits from growth
The future balance contains money contributed plus modeled growth. Showing both prevents a projection from implying that all future value came from investment performance.
Match rates and periods
An annual rate must be converted consistently when growth is modeled monthly or daily. Contributions made at the beginning of a period have slightly more time than contributions made at the end.
Test a range instead of one forecast
Compare a lower, central, and higher return assumption. The spread becomes especially wide over long periods, which is why a single projection should not be treated as a promise.
Example: growth on growth
$10,000 growing at 5% annually becomes $10,500 after one year. In the second year, the 5% applies to $10,500, producing $525 of modeled growth rather than $500.
What to check before you decide
- Fixed-rate projections smooth out real-world volatility.
- Taxes, inflation, and changing contribution behavior can reduce usable future value.
Sources behind this guide
These official and primary sources let you verify rules, definitions, and terms that may change.
Investor.gov — Compound Interest Calculator↗