How to Read a Yearly Projection Table

Why the table beats the headline number

The final value tells you where a projection ends; the table tells you whether the journey to get there makes sense. Consider two projections that end at the same balance. One might reach it with huge contributions and almost no growth; another with small contributions and aggressive returns. The headline number cannot tell them apart. The yearly rows can, because every row records how the balance actually built itself.

The table is also the only part of the calculator that shows the acceleration of compounding directly. The interest column growing from $440 to $2,923 over ten years, as in the sample below, is the whole concept of compound growth reduced to numbers you can trace with a finger.

Finally, a table is hard to fake accidentally. If the interest in a row is wildly inconsistent with the balance and rate shown, the mismatch usually surfaces here — which is exactly the point of the sanity check later in this article.

The columns, one by one

Most yearly tables on this site use the same five columns, and each one answers a specific question.

Year. Simply the number of years elapsed. It marks the position in the timeline and is the row's address in the story.

Starting balance. The account balance at the beginning of that year — which is always the previous year's ending balance. In the first row it equals whatever you entered as the initial amount.

Contributions. The deposits made during that year. If you contribute $200 a month, this column shows $2,400 in every row. Summing this column over all rows gives your total contributions — the money you personally put in.

Interest. The growth earned during that year, after contributions. It is the difference between the ending balance and (starting balance + contributions). On a smooth projection this column grows row after row, which is the compounding signature.

Ending balance. Starting balance + contributions + interest for that year. It becomes the next row's starting balance, which is how the chain connects.

A sample projection to follow

The table below shows $5,000 invested today plus $200 a month at 7%, compounded monthly, in five-year steps. Read it top to bottom once, then again column by column, and the pattern becomes unmistakable.

Three observations worth making. First, the interest column roughly triples between year one and year ten even though nothing changed except the balance. Second, the ending balance column grows faster in percentage terms early and in absolute terms late. Third, the contributions column is boringly constant — which is exactly why it is trustworthy.

You can also trace the chain backwards: the year 3 starting balance of $10,885 is the year 2 ending balance, and the year 5 starting balance of $17,652 is the year 4 ending balance. If that chain ever breaks — if a row's starting balance does not match the previous row's ending balance — the table has an internal inconsistency, and the whole projection deserves suspicion.

The sanity check: is the interest column plausible?

Here is a two-minute check you can run on any projection table, including this one. Start from the rule that a year's interest should be close to the starting balance times the annual rate — with a small upward adjustment if contributions were made during the year.

Step 1 — Take a row. Year 1 above: starting balance $5,000, rate 7%.

Step 2 — Multiply. $5,000 × 0.07 = $350. That is the interest a $5,000 lump sum would earn in a year with annual compounding.

Step 3 — Account for the extra. The table shows $440, not $350. The extra $90 comes from the $2,400 of monthly contributions arriving through the year and earning partial interest — plus a few dollars from monthly rather than annual compounding. The order of magnitude checks out.

Step 4 — Spot the outliers. If a table showed $1,200 of interest on a $5,000 starting balance at 7%, the projection is inconsistent — that would imply a rate near 24%, and something is wrong. If interest grows in a year when the starting balance shrank, also suspect.

For a pure lump sum with no contributions, the check is exact: $10,000 at 7% should show interest near $700 (annual compounding) or near $722.90 (monthly compounding), because $10,000 × ((1 + 0.07/12)^12 − 1) ≈ $722.90. The contribution column makes the check approximate, but it still catches the errors that matter.

What compounding frequency changes in the table

Compounding frequency decides how often the interest column "gets paid" and starts earning its own interest. The table below shows $10,000 at 7% for ten years under four frequencies. The final balances are the point of comparison.

Two lessons from this table. First, frequency matters much less than people assume — the full range from annual to daily compounding changes a ten-year result by only about 2.4%. Second, the frequency column in a projection table should be consistent across rows; a table that compounds monthly in the first decade and annually in the second is telling two different stories. The dedicated guide to compounding frequency explores why the effect stays small.

Use it as a planning tool, not a prediction

The table answers "if these assumptions hold, what happens?" It does not answer "what will happen?" Real accounts wobble, inflation erodes the future dollars, and taxes and fees take slices the table never shows. Treating the table as a forecast invites disappointment; treating it as a planning tool invites better decisions.

Here is a five-step routine for using any projection table responsibly:

• Check the assumptions. Rate, contribution, and frequency are listed somewhere — confirm they match reality.
• Run the sanity check. One row, balance times rate, approximate agreement.
• Find the row that matters. The year matching your goal, not the final row.
• Test a lower rate. Re-run with a more conservative assumption and compare the relevant row.
• Deflate for long horizons. If the goal is more than a decade away, look at the inflation-adjusted version before making decisions.

Done this way, the table becomes the most useful output the calculator produces — a map of how your plan behaves under its assumptions, with the assumptions kept honest.

Frequently asked questions

Why is the interest column not exactly balance × rate?

Because contributions arrive during the year and earn partial interest, and because compounding frequency adds the effective-rate effect. Both push the interest a little above the simple balance-times-rate estimate. The check is approximate, not exact.

Which row should I plan around?

The row matching your goal date. If you want the balance at year twelve, read row twelve — earlier rows show too little, later rows show a future you have not planned for.

Can the table tell me whether my assumptions are good?

It can tell you whether they are internally consistent, but not whether the rate will come true. Consistency is still valuable: an inconsistent table is wrong no matter how reasonable its rate. The calculator guide covers choosing defensible inputs in the first place.