How to use it
- Enter what you have saved already and how much you plan to add each time.
- Choose how often you deposit, the return you expect each year, and for how many years.
- Compare what you put in with the estimated returns, in the chart and the year-by-year table.
The formula
Balance(next month) = Balance × (1 + r ÷ n)^(n ÷ 12) + Deposit
r is the annual return and n the number of compounding periods per year. Converting the rate to a monthly factor lets any compounding choice work with any deposit schedule.
Worked example
Start with 1,000, add 200 every month for 10 years at an expected 5% a year, compounded monthly.
You deposit 1,000 + 200 × 120 = 25,000 in total.
The projected balance is about 32,700, so roughly 7,700 comes from estimated returns.
Assumptions
- The return stays the same every year. Real investments rise and fall.
- Taxes, account fees and inflation are not included.
- Returns are credited monthly; deposits are added at the start or end of each deposit period, as you choose.
Common mistakes
- Treating the projection as guaranteed. A bank deposit rate can be fixed; an investment return cannot.
- Using a nominal return without thinking about inflation. 5% growth with 3% inflation is about 2% in real terms.
- Mixing up the contribution per deposit with a monthly amount when depositing quarterly or yearly.
Questions
What return should I enter?
Use the rate your bank actually offers for a deposit account, or a cautious long-term figure for investments. Try a lower and a higher rate to see the range.
Does compounding frequency matter much?
A little. At 5%, monthly compounding gives an effective 5.12% a year versus 5% for yearly. The result panel shows the effective annual rate.
Is this halal / Sharia-compliant?
The calculator only does arithmetic on an expected return. Whether a particular product is suitable for you depends on how that product earns its return.
Estimates only. Your actual figures depend on the provider’s terms.