How Compounding Frequency Changes the Projection
The selected compounding frequency is part of the calculation rather than a display-only setting. The same nominal annual rate can produce different effective annual growth when interest is compounded at different intervals.
Regular contributions are modeled separately from investment growth. Real returns, fees, taxes and changing market conditions are not forecast by this deterministic projection.
Compound growth is easiest to understand by separating money you contributed from growth earned on the accumulated balance. Early in a long projection, contributions may do most of the work. Later, if the assumed return remains positive, growth on prior growth can become a larger share of the ending value. Small changes in the assumed rate also become more important over long periods, so it is usually better to test a range of returns than to treat one percentage as a forecast.
Frequently Asked Questions
Does changing compounding frequency change the result?
Yes. The calculator applies the frequency you select when converting the nominal annual rate into periodic growth.
Why does changing the return by one percentage point matter more over a long period?
Because each year's result becomes part of the base for later growth. The difference therefore compounds instead of being added only once.
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