What this calculator does
Takes a starting lump sum, a regular contribution amount (monthly or annual), an annual interest/return rate, a compounding frequency, and a time horizon. Returns the final balance, total contributed, and total interest/growth earned.
The formula
Future Value with lump sum and regular contributions:
A = P × (1 + r/n)^(n×t) + PMT × [(1 + r/n)^(n×t) − 1] / (r/n)
Where:
A = final balance
P = starting principal (£)
r = annual interest rate (decimal — 6% = 0.06)
n = compounding periods per year
(12 = monthly, 4 = quarterly, 1 = annual)
t = time in years
PMT = contribution per compounding period (£)
For annual compounding (n = 1) with no regular contributions:
A = P × (1 + r)^t
Total interest earned = A − P − (PMT × n × t)
Assumptions
- The interest/return rate is constant throughout the period.
- Contributions are made at the end of each compounding period (ordinary annuity).
- Interest is compounded at the frequency selected — more frequent compounding produces slightly higher returns.
- No fees, taxes, or other deductions are applied.
- No withdrawals during the period.
- The calculator models nominal returns — it does not adjust for inflation.
Data sources
No external data sources are used. This calculator applies a standard mathematical formula. The formula is derived from the future value of an ordinary annuity, which is a standard actuarial and financial mathematics identity.
Limitations
- Assumes a constant return rate. Real investment returns, savings rates, and market returns vary year to year.
- Does not model inflation — the final figure is in nominal pounds. To estimate real purchasing power, subtract the expected annual inflation rate from the return rate before entering it.
- Does not model fees or charges on investment accounts. Even a 0.25% annual platform fee materially reduces long-term returns.
- Does not model tax on interest or investment returns held outside a tax wrapper (ISA, pension). Use the ISA calculator for tax-free projections.
- Assumes contributions are made at the end of each period. If contributions are made at the start, actual returns will be marginally higher.
Worked example
Inputs: £5,000 starting balance, £100/month contribution, 6% annual return, monthly compounding, 10 years.
r/n = 6% / 12 = 0.5% per month = 0.005 n×t = 12 × 10 = 120 periods Lump sum component: £5,000 × (1.005)^120 = £5,000 × 1.8194 = £9,097 Contribution component: £100 × [(1.005)^120 − 1] / 0.005 = £100 × [1.8194 − 1] / 0.005 = £100 × 163.9 = £16,390 Final balance: £9,097 + £16,390 = £25,487 Total paid in: £5,000 + (£100 × 120) = £17,000 Interest earned: £25,487 − £17,000 = £8,487
Changelog
| Date | Change |
|---|---|
| May 2026 | Initial publication |