Ledgerly Compound Growth Calculator

What it is for

Compound growth means your money earns growth, and then that growth earns growth too. Over 20 or 30 years the effect is large, and so is the effect of small yearly fees. This calculator shows both. You enter a starting amount, a monthly contribution, the number of years, the return you expect and any yearly fees; it works month by month and shows the final balance, the same balance in today's money, how much you put in and how much the fees took.

You can add the contribution at the start or the end of each month, raise it every year (for example with your salary), and choose monthly, yearly or daily compounding. The calculator uses one constant return, so it shows a smooth path, not the ups and downs of a real market.

Worked example

You start with €10,000, add €200 at the end of every month for 20 years, expect 6 % a year, pay 0.8 % yearly fund fees and assume 2 % inflation.

• Balance at the end: €112,299.
• In today's money: €75,574 — what that balance buys at today's prices.
• Money put in: €58,000 (the €10,000 plus 240 × €200).
• Fees paid: €8,402.
• Lost to fees (incl. missed growth): €13,211. That is 10.5 % of the €125,510 you would have without fees, because the fee money would have kept growing too.
• Return after fees: 5.32 % a year; after fees and inflation 3.26 %.
• Doubling time: 13.4 years; the rule of 72 estimates 13.5.

To check the maths, try the textbook case: €10,000 at 5 % compounded yearly for 10 years, nothing added, no inflation. The tool returns €16,289 — the same as 10,000 × 1.05¹⁰ = 16,288.95.

How to read the result

• Balance at the end is the nominal amount on your statement in the final year.
• In today's money divides it by inflation. Use this one when you plan what the money will buy.
• Growth is everything the return added before fees; the summary also shows growth after fees.
• Lost to fees compares the result with the same plan without fees. This number is usually much larger than the fees you paid directly.
• The chart shows the balance, the balance in today's money and the money you put in. The space between the lowest line and the top line is what growth added.
• The year by year table lists contributions, growth, fees and the balance for every year.

Tips and common mistakes

• Use a return after inflation only if you set inflation to 0; otherwise you take inflation off twice.
• Compare fee levels with the same plan: change only the fee field and watch "Lost to fees".
• A return above 10 % a year triggers a warning. Long-term averages for diversified funds are usually lower, and real returns vary from year to year.
• If you get paid at the start of the month and invest straight away, choose "Start of each month"; it adds one month of growth to every contribution.
• For past inflation in your currency, look at the Inflation Time Machine and enter a rate that fits.

FAQ

What is the difference between monthly and yearly compounding?

Monthly compounding divides the yearly rate by 12, which ends slightly higher than the rate itself. Yearly compounding treats the rate as the real yearly result and spreads it evenly over the months.

Are taxes included?

No. Enter a return after tax if gains are taxed every year where you live.

Why is the doubling time different from the rule of 72?

The rule of 72 is a shortcut. The tool also calculates the exact time, ln 2 ÷ ln(1 + return), and shows both.

Does it work with Ledgerly?

Yes. In Ledgerly the same calculator starts from your household's free cash per month and can be saved and compared as variant B.