Understanding a growth illustration
Contributions, compounding and the limits of a projection.
Published by financecalc.co.uk · Editorial policy
Money paid in and growth
The savings, investment and pension tools separate what you put in from growth. Investment and pension illustrations use equal month-end deposits. The savings tool also allows start-of-month deposits and annual deposit increases.
How compounding is modelled
We convert your effective annual rate into a monthly rate. Growth is applied to the balance each month, so earlier growth can itself earn growth in later months.
An illustration is not a forecast
A constant rate makes scenarios easier to compare, but real investment returns vary and can be negative. Results exclude fees and tax. The savings tool offers a separate optional inflation-adjusted balance; investment and pension results exclude inflation. For pension illustrations, include employer payments and tax relief in the monthly contribution yourself.