Compound Interest with Contributions Calculator

What the compound interest with contributions calculator does

Most people save by starting with whatever lump sum they have and then adding a fixed amount each month. Enter your starting amount, annual return, monthly contribution and number of years, and this calculator projects the final balance, how much of it you contributed, and how much came from growth.

The money you put in is your starting amount plus every monthly deposit. The interest earned is everything compounding added on top. The growth share looks small in the early years and often becomes the largest part of the balance later.

How it works

Compound interest is earned on your original money and on interest already added. Each month the balance grows, the growth joins the balance, and the next month's growth is calculated on the larger figure. Each new contribution joins the same process from the month it arrives.

The calculator applies one month of growth, adds your contribution, and repeats for every month of the term. Each deposit compounds for a different length of time, so deposits made early are worth more at the end than those made near the finish, which is why people are advised to start saving early, even with small amounts.

The formula

FV = P × (1 + i)^n + PMT × ((1 + i)^n − 1) ÷ i

P is your starting amount, PMT the monthly contribution, i the monthly rate (the annual return divided by twelve), and n the number of months (years multiplied by twelve). The first term grows the lump sum; the second grows the series of contributions. At a zero return, the balance is the starting amount plus every deposit.

The four inputs

• Starting amount: the lump sum has the longest time to grow, so over long periods it often does a large share of the work.
• Annual return: a higher rate compounds faster but usually comes with more risk and bigger swings, so use a figure you can realistically sustain.
• Monthly contribution: regular deposits keep compounding once added, and raising the monthly amount often moves the final balance more than you might expect.
• Years: because growth builds on earlier growth, extra years at the end of a plan usually add more to the balance than the same number of years did at the start.

Reading your results

The future value is the projected balance at the end of the term. Total contributions is the money you put in. Interest earned is the difference, the growth from compounding.

The chart plots the balance at the end of each year. The line rises almost straight at first, when there is little growth to compound on, then curves upward as growth builds on earlier growth. Consistent saving over a long period matters far more than timing.

Using it

Use the tool to set a monthly savings amount, compare return assumptions, or see how much sooner a goal arrives with a slightly higher contribution, whether for retirement, a house deposit or something else. Real returns vary from year to year, so treat the output as an estimate. Run a cautious and an optimistic return, then try a slightly higher contribution, and choose a plan you can keep up for the many years compounding needs.

About This Compound Interest with Contributions Calculator

Use this compound interest with contributions calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.