Money deposited versus interest earned
The annual table separates money deposited from interest, which helps show whether a goal depends mainly on contributions or compounding. Effective annual yield is q^12 − 1. The first goal month checks unrounded balances at month-end, including month zero if starting money already covers the goal. A zero goal disables this milestone.
For a scenario with annual contributions and an inflation-adjusted result, the Investment Growth Calculator shows how purchasing power changes under the stated assumptions.
The formula
Rates in the formula are decimals. An APY already includes annual compounding, so its twelfth-root factor gives equivalent monthly growth. A nominal quote is divided by twelve. Iterate for 1–1,200 equal months; save each year-end and final partial-year balance.
One year of month-end deposits
Starting with 1,000 and adding 100 at each month-end for one year at 12% nominal annual interest, compounded monthly, produces 2,395.08. Total deposits are 2,200 and interest earned is 195.08. The last deposit earns no interest before the end of the modeled year.
How to use this calculator
- Enter your starting balance and equal monthly deposit.
- Choose a nominal annual rate compounded monthly, or enter an annual percentage yield (APY). Choose deposit timing and a whole year or month term.
- Enter an optional goal in the additional options to see the first month-end reaching it and the remaining shortfall or surplus.
Compare the contribution and interest portions
Raising the monthly deposit adds new money every month, while a higher interest assumption changes the growth of existing money. Compare these adjustments separately in the annual table. A plan that reaches its target only at a high rate may need a longer horizon or larger deposits if the actual account rate falls.
Read the goal gap with its sign
The goal gap is the entered goal minus the projected balance. A positive amount is a shortfall; a negative amount means the balance exceeds the goal. With a zero goal, that subtraction is simply the negative projected balance, not an amount you need to withdraw. The goal does not stop deposits when it is reached.
Match the quote to the rate entry
An APY describes one year’s growth including compounding. A nominal annual rate needs its compounding convention. Entering a 12% nominal rate with monthly compounding gives an effective annual yield of about 12.682503%; entering 12% APY gives 12% annual growth.
The APY option spreads annual growth evenly across twelve modeled months. It does not reproduce an account’s dated daily accrual or interest posting rules. Start-month deposits earn one additional modeled month relative to end-month deposits.
Assumptions & limitations
What this calculation assumes
- Equal fixed deposits at the selected month boundary.
- A constant nominal monthly rate or equivalent monthly APY factor.
- The goal uses the same monetary unit and does not stop later deposits.
What to keep in mind
- Taxes, fees, withdrawals, and rate changes are excluded.
- Inflation is not applied.
- The goal gap can be negative when the goal is exceeded.
- APY is represented by equal monthly growth rather than dated bank accrual.
Common questions
What does a negative goal gap mean?
The projected balance exceeds the entered goal by that amount.
Can the interest rate be zero?
Yes. The balance will equal starting money plus deposits.
Does this work for investments?
It models smooth interest; market investments fluctuate.
Should I enter an advertised APY as a nominal rate?
Choose APY for an annual percentage yield. Dividing APY by twelve as if it were nominal would count compounding twice and overstate growth.
Do deposits stop when I reach the goal?
No. The milestone reports the first month-end reaching it, while the projection continues every deposit through the full term.
Sources & further reading
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