Question 1

What does $1,000 grow to at 6% for 5 years?

Accepted Answer

$1,000 invested at 6% annual compound interest for 5 years grows to $1,338. Your original investment earns $338 in interest — a 33.8% total return and a 1.34× multiplier on your money.

Question 2

How long does it take to double money at 6%?

Accepted Answer

At 6% annual compound interest, your money doubles approximately every 12 years (the Rule of 72: 72 ÷ 6 = 12). Over 5 years, $1,000 has the potential to double 0.4 times.

Question 3

Is 6% a realistic return?

Accepted Answer

6% is a moderate return that aligns with long-term historical averages for diversified share portfolios. The ASX 200 has returned around 9–10% p.a. including dividends historically, so 6% is realistic over long periods after accounting for fees and portfolio mix.

Question 4

What's the effect of adding regular contributions?

Accepted Answer

These figures show a one-time lump sum of $1,000 with no additional contributions. Adding regular contributions compounds the growth dramatically. For example, adding $200/month to $1,000 at 6% 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 6% return and 2.5% inflation, your real return is approximately 3.5% p.a. In real terms, $1,338 in 5 years would buy meaningfully less than it does today.

Year	Balance	Interest
Yr 1	$1,060	+$60
Yr 2	$1,124	+$64
Yr 3	$1,191	+$67
Yr 4	$1,262	+$71
Yr 5	$1,338	+$76

Rate	Final balance	Interest earned	Multiplier
4%	$1,217	$217	1.22×
5%	$1,276	$276	1.28×
6% ◀	$1,338	$338	1.34×
7%	$1,403	$403	1.40×
8%	$1,469	$469	1.47×
9%	$1,539	$539	1.54×
10%	$1,611	$611	1.61×

Year	Balance	Interest this year	Total interest	Growth
Year 1	$1,060	+$60	$60	1.06×
Year 2	$1,124	+$64	$124	1.12×
Year 3	$1,191	+$67	$191	1.19×
Year 4	$1,262	+$71	$262	1.26×
Year 5	$1,338	+$76	$338	1.34×

Year	Balance	Interest
Yr 1	$1,060	+$60
Yr 2	$1,124	+$64
Yr 3	$1,191	+$67
Yr 4	$1,262	+$71
Yr 5	$1,338	+$76

$1,000 at 6% for 5 Years

How $1,000 grows at 6%

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Growth chart

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