Compound Interest & Real Return Calculator

Model nominal growth, after-tax returns, and inflation-adjusted purchasing power. See how each lever moves the result.

Investment

Initial investmentYour starting principal. Even a small amount benefits from compounding — the earlier you start, the more doublings you capture.

Annual contributionThe amount you add each year. Consistent contributions dramatically accelerate growth, especially in the early years.

Annual return7% reflects the long-term historical real return of a diversified US stock portfolio. Small differences in return rate produce dramatically different outcomes over 20+ years.

Initial investment $10,000

Annual contribution $2,400/yr

Annual return 7.0%

Years 20 yrs

Tax

Taxable accountCapital gains are taxed when you sell. Dividends may be taxed annually. Tax drag can cost hundreds of thousands over a long horizon.

401k / IRA (tax-deferred)All growth is deferred until withdrawal, when the full balance is taxed as ordinary income. Best when you expect to be in a lower tax bracket in retirement.

RothContributions are after-tax, but all growth and withdrawals are completely tax-free. Best when you expect to be in a higher bracket in retirement or want tax-free income in retirement.

Account type

Taxable: capital gains taxed at sale.

Capital gains tax 15%

Inflation

Inflation rate3% is the historical US average. At 3%, $1 today is worth about $0.74 in 10 years and $0.55 in 20 years.

Real valueThe inflation-adjusted chart shows what your balance is actually worth in today's dollars. This is the number that matters for retirement planning — not the nominal balance.

Inflation rate 3.0%

Compound Interest & Real Return Calculator — Results

Nominal balance

After-tax value

Real value (today's $)

Total contributed

Total gain

Purchasing power lost

Nominal (compound)

After-tax value

Real value (inflation-adj.)

Simple interest

This calculator is for educational and informational purposes only. Results are estimates based on the inputs you provide and should not be taken as professional advice. Tax treatment depends on your individual circumstances and jurisdiction. Past returns do not guarantee future results — the historical 7% figure for a diversified US stock portfolio is an average, not a guarantee. Always consult a qualified professional for decisions involving investments, taxes, or financial planning.

Compound Interest & Real Return Calculator

Compound Interest & Real Return Calculator — Results

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