Compound interest calculator
Freelancers have no employer match and no auto-enrolled 401(k); the compounding has to be self-inflicted. This shows what a starting balance plus a monthly habit becomes: the curve, the split between money you put in and money the return earned, and the honest assumptions underneath.
Results
Projected balance$300,851after 20 years
- You put in
- $130,000
- Growth earned
- $170,851
Estimate
workingfigures.com/calculators/compound-interest-calculator
The formula
Each month: balance = balance × (1 + annual return ÷ 12) + contribution. That is monthly compounding with end-of-month contributions; the chart plots the balance at each year boundary against cumulative contributions.
What this ignores
A constant return every month (real markets swing hard around any average), inflation, taxes on gains, fees, and contribution changes over time. An illustration of the mechanics, not investment advice or a forecast.
FAQ
- What return should I plug in?
- A common planning range for a diversified stock portfolio is 7-10% nominal per year based on long-run history, and using 5-7% keeps the estimate conservative after fees. The honest answer is that no one knows; run the calculator at two rates and treat the span between them as the plan.
- Why does the growth share explode in the later years?
- Because growth compounds on prior growth, not just on contributions. In year one the return works on a small balance; in year twenty it works on everything the first nineteen years built. That is why the curve bends upward and why starting years earlier beats contributing somewhat more later.
- Where should a freelancer actually put this money?
- Tax-advantaged accounts first: a solo 401(k) or SEP-IRA shelters far more than an IRA for self-employed people, and our solo 401(k) vs SEP-IRA calculator sizes the limits. This page only does the compounding math; account choice and fund choice are separate decisions worth real research.