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 the growth in the illustration. They assume you add the same amount at the end of each month.
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. These results do not account for fees, tax or inflation. For pension illustrations, include any employer payments and tax relief in the monthly contribution yourself.