Question 1

What does $100,000 grow to at 4% for 5 years?

Accepted Answer

$100,000 invested at 4% annual compound interest for 5 years grows to $121,665. Your original investment earns $21,665 in interest — a 21.7% total return and a 1.22× multiplier on your money.

Question 2

How long does it take to double money at 4%?

Accepted Answer

At 4% annual compound interest, your money doubles approximately every 18 years (the Rule of 72: 72 ÷ 4 = 18). Over 5 years, $100,000 has the potential to double 0.3 times.

Question 3

Is 4% a realistic return?

Accepted Answer

4% is a conservative assumption achievable through high-interest savings accounts or term deposits. It's a realistic baseline for low-risk investments, though actual rates vary with market conditions.

Question 4

What's the effect of adding regular contributions?

Accepted Answer

These figures show a one-time lump sum of $100,000 with no additional contributions. Adding regular contributions compounds the growth dramatically. For example, adding $200/month to $100,000 at 4% for 5 years would result in a significantly larger final balance. Use the interactive calculator above to model your own contribution amount.

Question 5

How does inflation affect this result?

Accepted Answer

This calculator shows nominal returns — the dollar figures before adjusting for inflation. Australia's historical inflation rate is around 2–3% per year. To estimate real purchasing power, subtract the inflation rate from your return: at 4% return and 2.5% inflation, your real return is approximately 1.5% p.a. In real terms, $121,665 in 5 years would buy meaningfully less than it does today.

Year	Balance	Interest
Yr 1	$104,000	+$4,000
Yr 2	$108,160	+$4,160
Yr 3	$112,486	+$4,326
Yr 4	$116,986	+$4,499
Yr 5	$121,665	+$4,679

Rate	Final balance	Interest earned	Multiplier
4% ◀	$121,665	$21,665	1.22×
5%	$127,628	$27,628	1.28×
6%	$133,823	$33,823	1.34×
7%	$140,255	$40,255	1.40×
8%	$146,933	$46,933	1.47×
9%	$153,862	$53,862	1.54×
10%	$161,051	$61,051	1.61×

Year	Balance	Interest this year	Total interest	Growth
Year 1	$104,000	+$4,000	$4,000	1.04×
Year 2	$108,160	+$4,160	$8,160	1.08×
Year 3	$112,486	+$4,326	$12,486	1.12×
Year 4	$116,986	+$4,499	$16,986	1.17×
Year 5	$121,665	+$4,679	$21,665	1.22×

Year	Balance	Interest
Yr 1	$104,000	+$4,000
Yr 2	$108,160	+$4,160
Yr 3	$112,486	+$4,326
Yr 4	$116,986	+$4,499
Yr 5	$121,665	+$4,679

$100,000 at 4% for 5 Years

How $100,000 grows at 4%

Year-by-year projection

Growth chart

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