Compound Interest Calculator with Monthly Deposits

Guide

The compound interest formula

For a single deposit the future value is A = P × (1 + r/k)^k×t, where P is the principal, r the annual rate as a decimal, k the number of compounding periods per year and t the number of years. Regular contributions are added each month and then grow at the same rate. This calculator simulates every month, so it handles any mix of compounding frequency and monthly deposits accurately rather than relying on a shortcut.

Worked example

Investing 1,000 at 5% compounded yearly for 10 years gives 1,628.89. Compounded monthly, the same deposit becomes 1,647.01 because interest is added twelve times a year. Add 100 every month for those ten years and the balance reaches about 17,175, of which 13,000 is your own money and the rest is growth. Over thirty years the effect becomes dramatic: growth usually ends up larger than all the money you put in.

The rule of 72

A quick mental check is the rule of 72: divide 72 by the annual rate to estimate how many years it takes money to double. At 6% it doubles in about 12 years; at 9% in about 8 years. The calculator gives the exact answer, but the rule is handy when comparing offers in a bank or on the phone.

Real return versus nominal return

Interest rates are quoted before inflation and before tax. If your savings earn 5% while prices rise 3%, your purchasing power grows only about 2% a year. Use our inflation calculator alongside this tool to see what your future balance is worth in today's money. Fees matter too: a 1% yearly fund fee can remove a quarter of the final value over thirty years.

Getting the most from compounding

Start early, contribute regularly, reinvest the interest and keep costs low. Time is the most powerful input in the formula, so even small monthly amounts started young often beat larger amounts started later. All calculations run privately in your browser and the currency follows your location.

Key terms

Principal

The money you start with before any interest is added.

Contribution

A regular deposit you add every month, which also earns interest from the month it is made.

Compounding frequency

How often earned interest is added to the balance: yearly, quarterly, monthly or daily. More frequent compounding gives slightly more growth.

Future value

The balance at the end of the period, made of your deposits plus all accumulated interest.

Effective annual rate

The true yearly growth once compounding is included; 5% compounded monthly equals about 5.12% a year.