How is compound interest calculated?

Compound interest is calculated as: Future Value = Principal × (1 + rate)^years. With monthly compounding (as used in most savings accounts), the formula adjusts to monthly periods. Our calculator uses this standard formula to project your wealth growth accurately.

What annual return should I assume for wealth planning?

This depends on your investment type. For diversified global equities, 7–10% per year is commonly used for long-term planning. For bonds or fixed income, 3–5%. For cash savings, 2–5% depending on current rates. Our calculator defaults to the current base rate for your selected country.

What is the Rule of 72?

The Rule of 72 is a quick mental math shortcut: divide 72 by your annual return rate to estimate how many years it takes to double your money. At 8% return, 72 ÷ 8 = 9 years to double. At 6%, it takes 12 years. At 4%, 18 years. This rule works remarkably well for rates between 2–15%.

Home CalculatorsWealth Growth Calculator

Loan Inflation SIP Wealth Rent vs Buy

Wealth Growth Calculator

Estimate how your savings grow at a given annual return.

Your Details

Starting Amount$15,000

Expected Return7.2%

Time Horizon48 MO (4.0 yr)

Results

Purchasing Power

$17,308.18

Principal: $15,000.00Interest: $2,308.18

Present Value

$15,000.00

Purchasing Power

$360.59

Value Lost

$2,308.18

Future Cost

$17,308.18

Estimates only - not financial advice. Verify with a qualified professional before making decisions.

Savings Tip

Pay 10% extra each month

Pay just 10% extra ($397/mo) and save $244 in interest, becoming debt-free 4 months earlier.

New Monthly Payment$397+$36/mo extra

Total Interest Saved$2444 months sooner

* Based on 10% overpayment applied every month until payoff.

How It Calculates

Over a term of 48 months, your fixed monthly payment is $360.59. Total interest paid is $2,308.18, which works out to a 7.2% annual cost of borrowing.

💡Total Interest on $15,000.00: $2,308.18

Monthly Commitment: $360.59

Tips to Save More

Adjusting the term length changes how much total interest you pay.
Comparing a few rate scenarios helps you see the true cost of borrowing.

Example Scenarios

Sample scenarios using current reference rate data.

Reference Data

$10,000 over 2 years

7.5% APR

Monthly Payment$450.00

Total Interest$799.90

Over a term of 24 months, your fixed monthly payment is $450.00. Total interest paid is $799.90, which works out to a 7.5% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

$20,000 over 4 years

6.9% APR

Monthly Payment$478.00

Total Interest$2,943.88

Over a term of 48 months, your fixed monthly payment is $478.00. Total interest paid is $2,943.88, which works out to a 6.9% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

$35,000 over 5 years

7.2% APR

Monthly Payment$696.35

Total Interest$6,780.96

Over a term of 60 months, your fixed monthly payment is $696.35. Total interest paid is $6,780.96, which works out to a 7.2% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

How a wealth growth calculator works

A wealth growth calculator projects the future value of a lump-sum amount compounding at a constant rate. It's the simplest compound-interest formula and is used to model everything from savings accounts to long-term equity holdings.

The formula

FV = PV × (1 + r)^n

FV = Future value - the projected end balance.
PV = Present value - what you start with today.
r = Annual rate of return as a decimal (5% = 0.05).
n = Number of years.

Inputs explained

Starting amount: The lump sum you want to grow.
Annual return: Expected average annual return. Use a conservative figure for planning.
Time horizon: How long you'll leave the money invested without withdrawing.

When to use this calculator

Projecting a one-off windfall (inheritance, bonus, sale proceeds) at several return rates.
Comparing leaving money in a savings account vs investing it for a long horizon.
Demonstrating the dramatic effect of time on compound interest.

Common mistakes to avoid

Withdrawing or 'tinkering' during the term.

The calculation assumes no contributions and no withdrawals. Each early withdrawal compounds against you for every remaining year.

Wealth Calculator - Frequently Asked Questions

Common questions about using this tool for CA.

A wealth growth calculator projects how a lump-sum investment grows over time at a given annual return rate. Unlike a SIP calculator (which handles regular contributions), this tool is for one-time investments or savings accounts where you want to see compound growth on an initial amount.

Built & maintained by: Dhanasekar · Developer

Formula reference: Bank of Canada

Data last updated: April 1, 2026

This is a free educational tool, not financial advice.

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Disclaimer

Important: This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual rates and terms may vary. Always consult a qualified financial advisor before making financial decisions.

Rate reference: FCACBank of CanadaUpdated 2026-04-01