Assumptions
What Return Assumption Should I Use for Cost of Delay?
The calculator needs a rate assumption to show the gap between starting now and starting later. Use scenarios to see sensitivity—no single number predicts the future.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
Run your scenarios
Test low/base/high rates with the same delay window.
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and provider rules vary by country/provider. Nothing here recommends buying, selling, or holding any investment.
Quick answer
Use three scenarios—low, base, high—to see sensitivity. Keep other inputs constant so the rate change is the only difference.
Average return assumptions explainedWhat a “return assumption” means
It’s an input for modeling, not a promise. It can represent interest for some savings products or potential returns for investments. Match the assumption to what you’re modeling and treat it as illustrative.
Low / base / high approach
A range is safer than one “best” number. These are examples only—adjust to your context.
Low (illustrative)
2–3%
Base (illustrative)
4–6%
High (illustrative)
7–9%
Your situation and product type may differ.
Why assumptions matter for cost of delay
- Higher assumed rates make the gap between start-now and start-later larger.
- Longer horizons give more time for differences to grow.
- Larger amounts magnify the gap.
Sensitivity example (illustrative)
£5,000, delay 12 months, horizon 15 years. A lower assumption yields a smaller cost of delay; a higher assumption widens it. Try low/base/high rates in the calculator to see the spread.
Try it in the calculatorKeep it realistic: net vs gross
Fees, taxes, and inflation can reduce what you keep. One approach is to test a slightly lower “net” assumption as an approximation. See more in the average return assumptions explainer.
How to run scenarios in the calculator
- Pick a delay window (e.g., 6 months, 1 year, 2 years).
- Run low/base/high rates with the same amount, horizon, and frequency.
- Save each scenario.
- Compare start-now vs start-later side-by-side.
Open the tool: Cost of Delay Calculator · See more cases: cost of delay examples.
FAQ
What is a return assumption?
It’s an illustrative rate used for modeling; it’s not a promise or prediction.
What’s a safe way to choose a rate?
Use low/base/high scenarios to see sensitivity instead of relying on one number.
Should I use APR or APY?
Stay consistent. If modeling a savings rate, use the format your product quotes. Keep it the same across scenarios.
Do fees and inflation change the rate I should use?
They can reduce net outcomes. Consider testing a lower “net” rate to see the impact.
Why does a small change in rate change the cost of delay a lot?
Higher rates magnify the gap between start-now and start-later, especially over longer horizons.
Can I use the tool for savings interest?
Yes. Enter the savings rate as your assumption and compare start dates. Keep the same units throughout.
Are calculator results guaranteed?
No. They are estimates based on your inputs; real outcomes vary.
How many scenarios should I run?
At least low/base/high for the same delay window to see a range of outcomes.
Final CTA
Save three scenarios—low, base, high—for the same delay window. Compare the estimated cost of delay side-by-side.