Free calculator for Canadians. See how a monthly contribution compounds over decades at any rate of return, with optional inflation adjustment to show purchasing power in today's dollars.
Compound Interest Calculator
Assumes monthly compounding and an ordinary annuity (contribution at the end of each month). Returns are nominal unless “Adjust for inflation” is toggled, in which case the final balance is deflated by 3% per year. Past performance does not guarantee future returns; the S&P 500's long-run nominal average since 1928 is approximately 10% annualized.
Here are a few illustrative scenarios you can verify directly with the calculator above. All assume the S&P 500's long-run 10% nominal annualized return with monthly compounding.
Notice the pattern: extending the horizon from 30 to 45 years on the same $100/month roughly quintuples the outcome. Time compounds, not effort.
The four inputs are designed to mirror a real investing decision. Starting amount is a one-time deposit you would make today — leave it at $0 if you are starting from scratch. Monthly contribution is what you plan to add every month for the rest of the horizon. Annual returnis the rate you expect your investments to earn (use 10% for the S&P 500's historical average, 7-8% to be more conservative, or 4% to model a high-interest savings account). Years invested is how long the money has to compound.
The headline number is your final balance in nominal dollars — the actual number that will sit in the account at the end of the horizon. Toggle Adjust for inflationto deflate it by 3% per year and see the same balance expressed in today's purchasing power. The stat tiles break out total contributions versus pure compound growth, and the growth chart shows how the gap between the two widens over time — most of the wealth in any long-horizon scenario shows up in the final third.
The math under the hood: monthly compounding on both the initial deposit and the recurring contributions. Final balance equals P × (1 + r/12)12y + PMT × ((1 + r/12)12y − 1) ÷ (r/12), where P is the starting amount, PMT is the monthly contribution, r is the annual rate as a decimal, and y is the number of years. The real-dollar view divides the result by (1.03)y.
The entire secret to compounding is one word: time. The earlier you start, the less you have to put in to end up with more. A Canadian investing $100/month from age 20 to 65 at a 10% return ends with about $1,050,000. The same $100/month starting at age 30 ends with about $380,000. The extra $12,000 contributed in their twenties grew into roughly $668,000 by retirement — about 30 times what the same $12,000 contributed in their fifties would be worth.
That means the most important financial decision most Canadians ever make is not what to invest in or how much, but whether to start at all. The habit of contributing something — anything — every month beats waiting for the right moment, the right amount, or the right level of income. The calculator above exists to let you see that pattern with your own numbers.
Read the full guide
The full article behind this calculator: the story of two investors, why starting at 20 beats starting at 30 by $670,000, the cost of waiting, why the COVID crash proves timing the market doesn't work, and how registered accounts amplify the compounding effect.
Read the article →Frequently asked
Enter a starting amount, monthly contribution, expected annual return, and number of years. The calculator uses monthly compounding on both the initial deposit and the recurring contributions, which is how Canadian investment accounts actually work. The formula for the recurring contribution side is the standard ordinary-annuity future value: PMT × ((1 + r/12)^(12 × years) − 1) ÷ (r/12). Your starting deposit is compounded separately as principal × (1 + r/12)^(12 × years). The two are summed to give your final balance.
The S&P 500's long-run nominal annualized return since 1928 is approximately 10%. A more conservative assumption for a globally diversified equity portfolio over multi-decade horizons is 7-8%. Use 4% to model a high-interest savings account, or 2% to see what cash earns against inflation. Past performance does not guarantee future returns, but the long-run average has been remarkably stable across multi-decade horizons.
It deflates your final nominal balance by 3% per year (the long-run Canadian inflation average) so you can see what your money will actually buy in today's dollars. A million dollars in 45 years sounds enormous, but at 3% inflation it buys what about $278,000 buys today. The toggle helps you compare future wealth honestly against current purchasing power.
At a 10% annualized return with monthly compounding, $100 a month invested for 30 years grows to about $226,000. The same $100 a month invested for 45 years grows to about $1,050,000. Extending the horizon by 15 years roughly quadruples the outcome, which is the central insight of compound interest: time matters far more than the amount you contribute.
The compounding math itself is identical, but the tax treatment changes how much actually compounds. Inside a TFSA, RRSP, or FHSA, all growth is tax-sheltered and every dollar of return stays invested. In a non-registered account, the CRA taxes interest, dividends, and realised capital gains every year, which can reduce a 10% raw return to about 7% after tax for a high-marginal-rate investor. Over 45 years that drag turns a $1,050,000 outcome into roughly $380,000.
It is a teaching tool, not financial advice. It assumes a constant rate of return, regular contributions, and ignores taxes outside of registered accounts. Real retirement planning needs to model TFSA/RRSP/FHSA contribution limits, withdrawal rules, CPP, OAS, sequence-of-returns risk, and inflation variability. Use this calculator to build intuition about how compounding works, then talk to a qualified planner before making large decisions.
Wealthsimple opens a TFSA, RRSP, and FHSA for free with no minimum balance and no monthly fee. A low-cost S&P 500 or all-world index ETF held inside a TFSA, with automatic monthly contributions, is one of the most-recommended starter portfolios for Canadians. The compounding starts the day your first contribution clears.