Understanding your result
The future balance includes your initial deposit, every monthly contribution, and accumulated interest. The chart and table separate the amount you put in from the interest earned.
To compare compounding with interest earned only on the original principal, use the Simple Interest Calculator with the same principal, annual rate, and duration.
The formula
P is the initial deposit, r is the nominal annual rate as a decimal, n is compounding periods per year, and t is years. With monthly deposits, we use an equivalent monthly factor q = (1 + r/n)^(n/12). Each month, the previous balance is multiplied by q, with the contribution added before or after that growth according to your selection.
A single deposit over ten years
An initial deposit of 10,000 at a nominal annual rate of 5%, compounded annually with no additional contributions, grows to 16,288.95 after 10 years. The deposited amount stays 10,000 and the interest earned is 6,288.95.
How to use this calculator
- Enter your initial deposit and planned monthly contribution.
- Set an annual rate and a whole number of years.
- Choose a currency label. In Advanced options, set compounding frequency and contribution timing.
- Calculate and compare the balance, interest, growth chart, and annual breakdown.
Why compounding matters
Interest can earn further interest when it stays invested. The longer the balance grows, the larger this effect can become. Regular contributions also increase the base that earns interest.
A fixed rate is useful for comparing scenarios, but market investments do not earn a smooth return. Actual returns can be negative and the sequence of returns affects the result.
Nominal rate versus effective annual rate
The nominal rate is the quoted annual rate before accounting for compounding within the year. At a positive nominal rate, more frequent compounding produces a slightly higher effective annual rate.
For example, 12% nominal interest compounded monthly applies 1% each month. The effective annual growth is (1.01)^12 − 1, or about 12.68%. If your starting rate is already an effective annual rate, choose annual compounding.
Assumptions & limitations
What this calculation assumes
- The interest rate and monthly contribution stay constant.
- Monthly deposits use an equivalent monthly growth factor even when compounding is annual, quarterly, or daily.
- The currency selector labels amounts; it does not convert exchange rates.
- Calculations retain 32 significant digits internally; monetary results are rounded to two decimals.
What to keep in mind
- Taxes, fees, inflation, withdrawals, and variable returns are excluded.
- This is a mathematical scenario, not a prediction or a guaranteed investment return.
- A provider may credit interest differently or use a different day-count convention.
Common questions
What happens if the interest rate is zero?
The future balance equals the initial deposit plus all monthly contributions. There is no interest earned.
Does the timing of contributions matter?
Yes. A contribution at the start of a month receives that month’s growth. An end-of-month contribution begins growing in the next month.
Can I use this for another currency?
Choose one of the currency labels, or treat every amount consistently in your currency. The arithmetic does not depend on currency and no exchange conversion is performed.