This compound interest calculator projects a future balance from a starting amount, a monthly contribution, an annual return, and a number of years. Compounding is monthly. Each contribution is treated as if it arrives at the end of the month, so it does not earn that month's return.
The result is a mathematical projection, not a forecast of a bank account, a brokerage account, or a retirement plan. Markets do not pay a constant monthly rate. Fees, taxes, and inflation are not deducted. The useful part is seeing how the starting balance and the deposits combine, and how much of the ending number is growth rather than money you put in.
How to use this calculator
- Enter the initial investment in US dollars. Use 0 if you are starting from nothing.
- Enter the monthly contribution. Use 0 if you will not add money.
- Enter the annual return as a percent. A 7% illustration is entered as 7.
- Enter the number of years, then press Calculate. The headline is the projected ending balance.
How monthly compounding and deposits are combined
The annual return is divided by 100 and then by 12 to produce a monthly rate. Ten years is 120 monthly periods. The starting balance grows by that monthly rate, compounded, which is the familiar principal times (1 + r) raised to the number of months.
Contributions are handled separately as an ordinary annuity. The future value of a series of equal end-of-month deposits is the deposit times (((1 + r)^n − 1) / r). The calculator adds that to the future value of the starting balance. It does not multiply the contribution piece by an extra (1 + r), which is what a beginning-of-month deposit would require.
The detail lines split the ending balance into money contributed and estimated growth. Contributions equal the starting amount plus every monthly deposit. Growth is the ending balance minus that sum. Growth can be larger than the deposits, and it can also be zero when the return is zero.
Formula
Monthly rate r = annual percent / 100 / 12 Months n = years × 12 Future value of principal = principal × (1 + r)^n If r = 0: future value of deposits = monthly deposit × n Otherwise: future value of deposits = monthly deposit × (((1 + r)^n − 1) / r) Ending balance = those two future values added Contributions = principal + monthly deposit × n Growth = ending balance − contributions
End-of-month timing means a deposit made on the first day of the month would be worth slightly more than this model shows, because it would earn that month's return. The difference is one month of growth on each deposit, which is the ordinary-annuity result multiplied by (1 + r).
A 0% return skips the division by r. The ending balance is then exactly the money you contributed, and growth is zero. That check confirms the form is not inventing a return you did not enter.
Worked compound-growth examples
$10,000 plus $250 a month at 7% for 10 years
Starting balance 10,000, monthly contribution 250, annual return 7, years 10. There are 120 months, and the monthly rate is 0.07 / 12. The calculator shows an ending balance of $63,367.82, total contributions of $40,000.00, and estimated growth of $23,367.82.
The $40,000 of contributions is the original $10,000 plus 250 times 120. Of the ending balance, about $20,096.61 comes from compounding the original $10,000, and about $43,271.20 comes from the deposits and the growth on those deposits. The two pieces add to the $63,367.82 headline. You did not "earn" $63,367.82 from the market. A large share is money you paid in.
The same $10,000 with no monthly deposit
Set the monthly contribution to 0 and leave 10,000, 7%, and 10 years. The calculator shows $20,096.61, contributions of $10,000.00, and growth of $10,096.61. The balance a little more than doubles.
A rough check is the rule of 72: 72 / 7 is about 10.3 years to double at 7% a year. Ten years of monthly compounding lands just past a double, at $20,096.61, which is consistent with that shortcut. The rule of 72 is only a check. The calculator's figure is the one that uses the monthly formula.
Deposits only, a longer 5% case, and a zero return
Start at 0, contribute 250 a month, and keep 7% for 10 years. Contributions are 250 times 120, or $30,000. The calculator shows $43,271.20 and growth of $13,271.20. Every dollar of the ending balance came from the deposits and their growth, because the starting balance was zero.
A longer illustration: $5,000 to start, $100 a month, 5% a year, 20 years. Contributions are 5,000 plus 100 times 240, or $29,000. The calculator shows $54,666.57 and growth of $25,666.57. The same $10,000 and $250 a month for 10 years at a 0% return shows $40,000.00 and growth of $0.00. No return was entered, so none is invented.
Projected balances from this calculator
| Start | Monthly | Annual rate | Years | Contributions | Ending balance | Growth |
|---|---|---|---|---|---|---|
| $10,000 | $250 | 7% | 10 | $40,000.00 | $63,367.82 | $23,367.82 |
| $10,000 | $0 | 7% | 10 | $10,000.00 | $20,096.61 | $10,096.61 |
| $0 | $250 | 7% | 10 | $30,000.00 | $43,271.20 | $13,271.20 |
| $5,000 | $100 | 5% | 20 | $29,000.00 | $54,666.57 | $25,666.57 |
| $10,000 | $250 | 0% | 10 | $40,000.00 | $40,000.00 | $0.00 |
What a constant return leaves out
A savings account, a bond, and a stock fund do not credit the same rate every month. Sequence of returns matters once you are withdrawing money, and this calculator never models withdrawals. It only compounds forward.
Taxes can reduce what you keep, either each year in a taxable account or later in a tax-deferred one. Inflation reduces what the ending balance can buy. Neither is applied. A 7% illustration that ignores a 3% rise in prices is not a 7% increase in purchasing power.
Fees work like a lower return. If a fund expense ratio is 0.20%, a 7% market illustration is closer to 6.8% after that fee, and you would enter 6.8 rather than expect the form to subtract expenses. Contribution limits, employer matches, and penalties for early withdrawal are also outside the formula.
Frequently asked questions
Does my monthly deposit earn a return in the month I add it?
Not in this calculator. Deposits are treated as end-of-month contributions. They start compounding in later months. A beginning-of-month deposit would use the same annuity formula multiplied by one extra month of growth.
How often does the interest compound?
Monthly. The annual percent is divided by 12, and that monthly rate is compounded once per month for years times 12. Annual compounding, daily compounding, and continuous compounding are different formulas and will not match this result.
Is the ending balance a prediction of investment growth?
No. It is the balance you would have if the annual return you typed were credited evenly every month, with no fees, taxes, inflation, or withdrawals. A 7% figure is an illustration you chose, not a rate the calculator expects the market to pay.
How do I model a one-time deposit and nothing more?
Enter the one-time amount as the initial investment and set the monthly contribution to 0. At 7% for 10 years, $10,000 grows to $20,096.61 in this calculator, with $10,096.61 of that coming from growth.
What does estimated growth mean?
It is the ending balance minus every dollar you contributed. Contributions are the starting amount plus the monthly deposit times the number of months. Growth is not cash you can spend without selling or withdrawing, and it has not been reduced for taxes.