How this calculator works
You enter five things: a starting amount, a monthly contribution, the number of years, an annual interest rate or return, and how often interest compounds (daily, monthly, quarterly or annually). The calculator adds each contribution at the end of the month and applies the same rate in every year of the projection, with no withdrawals along the way.
The results show the ending balance, the total you contributed and the growth, with a year-by-year chart of the balance beside your contributions. Three extra figures help you read them: the share of the balance that is growth, the first year in which growth is larger than everything contributed, and the equivalent annual yield (APY) of your rate and compounding. Taxes, fees and inflation are left out.
The formula
The calculator first turns the annual rate into a monthly growth rate. With monthly compounding, that is simply the annual rate divided by 12. For daily, quarterly or annual compounding, it uses the monthly rate that grows to the same yearly yield, so every frequency can share one month-by-month timeline with your deposits.
The starting amount grows at that monthly rate for every month in the period. Each contribution grows only for the months left after it is added, which is why early deposits end up producing more growth than later ones. At a 0% rate there is nothing to compound, and the balance is the starting amount plus every contribution.
A worked example
Suppose, as an illustration, you start with $5,000, add $200 at the end of every month for 25 years, and assume a steady 6% annual return compounded monthly. The calculator shows a balance of about $160,924. Of that, $65,000 is money you contributed and $95,924 is growth, so growth makes up about 60% of the ending balance.
The table shows why time matters so much in this model. Growth stays smaller than your contributions for many years, then overtakes them in year 20, when earlier growth is producing sizable growth of its own. The figures come from an assumed constant rate; they are not a prediction of what any investment will earn.
| Year | Balance | Total contributed | Growth |
|---|---|---|---|
| 5 | $20,698 | $17,000 | $3,698 |
| 10 | $41,873 | $29,000 | $12,873 |
| 15 | $70,434 | $41,000 | $29,434 |
| 20 | $108,959 | $53,000 | $55,959 |
| 25 | $160,924 | $65,000 | $95,924 |
What the result doesn’t tell you
Real returns don’t arrive at a steady rate. Investment values rise and fall, sometimes for years at a time, and savings rates can change. The assumed rate also drives much of the result: with the same $5,000 start and $200 a month for 25 years, the calculator shows about $116,395 at 4% and about $226,906 at 8%.
The projection also leaves out fees, taxes and inflation, each of which can reduce what the ending balance is worth. It is most useful as a way to compare scenarios rather than as a forecast. Change one input at a time and notice which part of the difference comes from your own deposits and which from the assumed growth.
Common questions
What is the difference between compound and simple interest?
Simple interest is figured only on the original amount. Compound interest is also figured on interest already added to the balance, so each period starts from a larger base. With simple interest at 4% a year, $1,000 earns $40 a year and reaches $1,080 after two years. Compounded annually, the second year’s 4% applies to $1,040, and the balance reaches about $1,082.
How often is interest compounded, and does it matter?
For a deposit account, the account disclosures state how often interest is compounded and credited. The frequency usually matters less than the rate and the time. In the worked example above, switching from monthly to daily compounding adds about $391 over 25 years ($160,924 to $161,315), while compounding only once a year gives about $156,717.
What rate should I use?
It depends on where the money is. For a savings account or certificate of deposit, you can enter the APY it pays now with compounding set to annually, since an APY already includes compounding, keeping in mind that a variable rate can change. For investments, no rate is guaranteed and returns can be negative in some years. Running a lower and a higher rate beside your main guess shows how much the result depends on that one assumption.
How long does it take money to double?
The Rule of 72 gives a rough answer: divide 72 by the annual rate. At 6%, that suggests about 12 years, and the calculator agrees closely, showing $1,000 compounded annually at 6% growing to about $2,012 in 12 years. The shortcut assumes a steady rate, which investment returns don’t follow, so treat it as an estimate.
Does the calculator include taxes, fees or inflation?
No. It shows growth before any of them. Fees reduce the amount left to grow, taxes may apply to interest, dividends or gains depending on the type of account, and inflation reduces what a future dollar can buy. For a rough sense of an annual fee’s effect, you can lower the rate by the fee’s percentage and compare the two balances.
Terms on this page
Sources and further reading
Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.
Keep learning
Investing · 3 min read
Compound Interest Explained: A Simple Example
See how compound interest differs from simple interest, follow a worked example, and understand why contributions and assumptions matter.
Read the guideBanking · 3 min read
APY vs. Interest Rate: Reading a Savings Offer
Understand what APY includes, how it differs from a stated interest rate, and why fees and changing rates matter when comparing savings accounts.
Read the guideInvesting · 3 min read
Expense Ratios: What a Fund Costs to Own
Convert a fund’s expense ratio into an approximate dollar cost. Learn where fees appear and which additional charges the ratio does not include.
Read the guide
More free calculators
Money Foundations
Savings Goal Calculator
Free savings goal calculator. See how much to set aside each month, every two weeks or each week to reach a goal on time, with or without interest.
Open the calculatorBanking
APY Calculator
Free APY calculator. Convert an interest rate and compounding frequency into annual percentage yield, and see the interest a deposit could earn.
Open the calculatorRetirement
401(k) Match Calculator
Free 401(k) match calculator. Enter your pay, contribution and match formula to see the yearly match, any match left unclaimed and the rate for all of it.
Open the calculator