How It Works
This calculator assumes your balance compounds monthly at the rate you enter, and that any monthly contribution is added at the end of each month. It combines the growth of your starting amount with the growth of your ongoing contributions to show a projected future value.
A constant annual return is a simplification used to illustrate the mechanics of compounding — actual markets and interest rates fluctuate, sometimes significantly.
Formula
- FV — Future value
- P — Starting principal
- C — Monthly contribution
- r — Monthly interest rate (annual rate ÷ 12)
- n — Number of months
Example
Example inputs: Starting amount $5,000, $200/month contribution, 7% estimated annual return, 20 years.
Result: Total contributions: $48,000.00. Total interest earned: $71,379.03. Future value: $124,379.03.
Frequently Asked Questions
What return rate should I use?
This calculator doesn't recommend a rate — enter whatever assumption is relevant to your situation, such as a savings account's stated APY or a rate you're modeling for a hypothetical investment. We don't provide or endorse any specific rate of return.
Is compound interest guaranteed?
No. This tool projects growth assuming a constant rate, which is a simplification. Savings accounts and CDs may offer fixed rates, but investment returns fluctuate and can lose value, including the possibility of loss of principal.
What's the difference between this and the Savings Goal Calculator?
This calculator shows what a given contribution grows into. The Savings Goal Calculator works backward from a target amount to tell you the monthly contribution needed to reach it.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.