Question 1

Does the Rule of 72 actually work?

Accepted Answer

Yes, with caveats. The Rule of 72 says your money doubles in 72 / rate years. At 7% that's about 10.3 years — and the precise answer is 10.24 years, so the rule is off by 0.06 years. It works because ln(2) ≈ 0.693 and the rule cleanly approximates it for rates between 4% and 12%. Outside that range it drifts: at 1%, true doubling is 69.7 years vs. the rule's 72; at 20%, true is 3.8 years vs. 3.6. Use it as a mental shortcut, not a planning tool — that's what this calculator is for.

Question 2

Why does starting early matter so much?

Accepted Answer

Compounding rewards time, not effort. If you invest $200/month from age 25 to 65 at 7% annual return, you end with about $525,000 — having contributed $96,000. If you start at age 35 with the same $200/month, you end with $245,000 — having contributed $72,000. The 10 extra years of contributions add only $24,000 to what you put in, but they add $280,000 to the result. Look at the chart: the slope steepens sharply in the last decade. The early years build the base; the late years feed on it.

Question 3

What does the inflation toggle actually do?

Accepted Answer

It divides every projected balance by (1 + inflation)^years so you see the result in today's purchasing power. $686k in 30 years at 2.5% inflation is worth about $327k today. The nominal number is what your statement will say; the real number is what it will actually buy. Both are true, both matter. Use real to compare to today's expenses; use nominal to compare to a future tax bracket or a contractually fixed obligation.

Question 4

What kind of account does this model?

Accepted Answer

A generic investment account — no taxes, no fees, no contribution limits. It's the pure compound-growth math. Real accounts apply on top: a TFSA shelters the gains entirely, an RRSP defers tax until withdrawal, a taxable account taxes interest and dividends as they're earned. For most planning, run this calculator first to see the ceiling, then narrow down with the account-specific tool.

Question 5

Why does daily compounding barely change the answer?

Accepted Answer

Because the rate is split across more periods. At 7% annual, monthly compounding gives an effective annual rate of 7.229%; daily gives 7.250%. The gap is 2 basis points — a $20-per-$10k-per-year difference. Real banks advertise 'daily compounding' as a feature because it sounds better than monthly, but the math impact is rounding error compared to your actual rate or savings rate.

$200/month from age 25 to 65 ends at $525,000. Wait until 35 and it ends at $245,000 — the same monthly habit, half the result.

Your numbers, your plan.

Compound interest is the engine

Read the chart, not just the number

Nominal versus real

Where to go next

Other Canadian FIRE tools