The formula behind the table
A lump sum grows as A = P × (1 + r/n)nt, where r is the annual rate, n the compounding frequency, and t the years. Monthly deposits each grow from their own start date, so the calculator converts your rate to an effective monthly rate and compounds every deposit forward month by month — the same math banks and brokerages use.
Why the last years dominate
$250/month at 7% is worth about $42,000 after 10 years, $124,000 after 20, and $283,000 after 30. The final decade adds more than the first two combined, because by then interest is earning interest on a large base. This is why starting five years earlier routinely beats contributing more money later — time is the input compounding rewards most.
Does compounding frequency matter much?
Less than people think. $10,000 at 7% for 20 years grows to $38,697 compounded annually and $40,547 compounded daily — about a 5% difference over two decades. The rate and the time horizon matter far more than the frequency. Use the Rule of 72 for quick estimates: money doubles in roughly 72 ÷ rate years (at 7%, about every 10.3 years).
Common mistakes to avoid
Three errors quietly wreck compound-interest projections. First, using a nominal return without subtracting inflation — a $500,000 balance in 30 years buys roughly half of what it sounds like at 3% inflation, so plan in real terms for anything long-range. Second, assuming an unrealistic rate: 12% makes any plan look effortless, but 6-7% is the honest planning figure for a diversified portfolio. Third, ignoring fees and taxes — a 1% annual fund fee compounds against you exactly the way returns compound for you, and in a taxable account, yearly tax drag lowers your effective rate. Enter conservative numbers and let reality pleasantly surprise you rather than the reverse.