Reasoned Markets

Decision tool

Compound-return calculator

Explore how an initial amount and equal periodic contributions behave under a constant effective annual return assumption.

Calculator

Project a constant-return scenario

Choose a compounding frequency and when each equal contribution enters the calculation.

Zero is allowed when contributions are positive.

Must be greater than -100%.

Must create a whole number of periods.

Whole number from 1 to 365.

Equal contribution made every compounding period.

Beginning contributions receive one additional period of growth.

Method

Formula and logic

The effective annual rate is converted to the equivalent rate for each compounding period. Principal and each equal contribution then receive the number of periods implied by the chosen timing.

Beginning-of-period contributions receive one more period of growth than end-of-period contributions. Total cash contributed remains separate from mathematical growth.

Verification

Worked example

An initial 1,000 with no contributions and a constant 10% effective annual return ends one year at 1,100 before fees, taxes, and inflation whether the equivalent periodic rate is applied annually, monthly, or daily.

Boundaries

Limitations

  • Constant returns are a mathematical assumption, not a forecast or guarantee.
  • Fees, taxes, inflation, contribution interruptions, withdrawals, and sequence variation are excluded.
  • The model does not represent market volatility or investment-specific risk.

Questions

Frequently asked questions

Is the annual rate nominal or effective?
Effective. Changing compounding frequency changes the periodic rate and contribution timing, but does not inflate the entered annual return itself.
Is the ending balance a forecast?
No. It is a mathematical scenario that assumes one constant return path and uninterrupted contributions. Actual returns vary and may be negative.