compound interest vs benchmark
"Good returns" without a reference is marketing talk. The same R$15,000.00 invested at 1% a month for 180 months (15 years) turns into R$389,685.15 with monthly contributions of R$600.00, but that number only means something once it is compared to a concrete alternative, such as a 0.5%-a-month benchmark, which closes at R$211,302.63 over the same period, with the same total amount invested.
Same total invested on both sides, R$123,000.00 (R$15,000.00 upfront plus 180 monthly contributions of R$600.00): at 1% a month the balance reaches R$389,685.15, at 0.5% a month it reaches R$211,302.63.
R$389,685.15 minus R$211,302.63 equals R$178,382.52. That entire gap comes only from the monthly rate being twice as high, since the amount contributed is identical.
Compound: 15000 x (1.01)^180 = R$89,937.03. Simple: 15000 x (1 + 0.01x180) = R$42,000.00. The R$47,937.03 gap shows the effect of interest earning interest, isolated from any contributions.
Yes. The tool compounds the balance month by month and adds the recurring contribution every period, which makes it much more useful for real accumulation planning than a simple lump-sum-only model.
No. The benchmark can be any reference rate that makes sense for your case, a savings account, a CD, a fund or even a hypothetical rate you want to test. What matters is using the same term and the same total amount invested on both sides, so the comparison stays fair.
Not automatically. Beating the benchmark's final balance shows the rate is higher, but each alternative's risk, liquidity, costs and taxation still weigh into the decision. A higher rate with much higher risk or money locked up for years may not be worth the gap shown in the comparison.
Because the rate gap acts on a balance that has already grown, month after month, across the entire term. In this scenario, a 0.5 percentage-point monthly difference, applied over 180 months to a balance that reaches hundreds of thousands of reais, turns into a R$178,382.52 final gap, even with the same total amount invested on both sides.
⚠️ Educational simulation with monthly compounding. It does not replace portfolio advice, suitability review or net return calculations with real taxes and fees.
Re-runs the simulation with the same contribution and horizon, changing only the rate, so you can see the gap at the end.
By the end of the horizon, your strategy earns R$178,382.52 (84.4%) more than the benchmark.
Mathematical simulation with monthly compounding and recurring contributions. It does not include income tax, IOF, administration fees, custody fees or slippage.
Portfolio growth
Breakdown
| Year | Invested | Return this year | Balance | Real value |
|---|---|---|---|---|
| 1 | R$22,200.00 | R$2,311.88 | R$24,511.88 | R$23,456.34 |
| 2 | R$29,400.00 | R$3,518.22 | R$35,230.10 | R$32,261.26 |
| 3 | R$36,600.00 | R$4,877.56 | R$47,307.66 | R$41,455.54 |
| 4 | R$43,800.00 | R$6,409.30 | R$60,916.96 | R$51,082.60 |
| 5 | R$51,000.00 | R$8,135.30 | R$76,252.25 | R$61,188.70 |
| 6 | R$58,200.00 | R$10,080.20 | R$93,532.45 | R$71,823.17 |
| 7 | R$65,400.00 | R$12,271.76 | R$113,004.21 | R$83,038.71 |
| 8 | R$72,600.00 | R$14,741.26 | R$134,945.47 | R$94,891.65 |
| 9 | R$79,800.00 | R$17,523.97 | R$159,669.43 | R$107,442.27 |
| 10 | R$87,000.00 | R$20,659.58 | R$187,529.02 | R$120,755.13 |
| 11 | R$94,200.00 | R$24,192.88 | R$218,921.89 | R$134,899.39 |
| 12 | R$101,400.00 | R$28,174.28 | R$254,296.17 | R$149,949.26 |
| 13 | R$108,600.00 | R$32,660.62 | R$294,156.79 | R$165,984.33 |
| 14 | R$115,800.00 | R$37,715.95 | R$339,072.74 | R$183,090.08 |
| 15 | R$123,000.00 | R$43,412.41 | R$389,685.15 | R$201,358.28 |
Return this year = interest generated within that year on the accumulated balance.
Local browser-based simulation. This is not investment advice.