Compound interest calculator
Free compound interest calculator with monthly deposits. Compare a fixed-rate growth scenario, total contributions and interest, with explicit assumptions.
By Calcr · Updated
Free compound interest calculator with monthly contributions
Project a balance using an initial amount, a fixed monthly contribution, a nominal annual interest rate and a time period. This free compound interest calculator separates money contributed from modeled interest. It assumes monthly compounding and deposits at each month-end. The result describes a fixed-rate scenario; it does not predict market returns, recommend an investment or guarantee that a balance will be available.
Choose the inputs for one consistent scenario
The initial balance is present at the start. The monthly contribution is added after that month's interest calculation. Enter zero contributions to examine one lump sum, or zero initial balance to examine deposits alone. This form accepts nonnegative balances, deposits and rates; it does not model withdrawals, negative returns or an account that can become overdrawn.
Enter the nominal annual rate, not APY. A nominal rate of 6% becomes a monthly rate of 0.5% in this model. APY already reflects compounding, so dividing an APY by twelve is a different assumption. Check the account or scenario's rate definition before comparing the result with another calculator. The time must equal a whole number of months; half a year represents six months.
Compound interest formula
Let P be the initial balance, C the contribution at each month-end, i the nominal annual rate divided by twelve in decimal form, and N the number of months. The final balance is P * (1 + i)^N + C * ((1 + i)^N - 1) / i. The first term grows the initial balance; the second accumulates the later deposits over their remaining months.
When i is zero, final balance is P + C * N. Total contributed is also P + C * N, and modeled interest is final balance minus that contributed amount. Keeping these quantities separate prevents deposits from being mistaken for investment gains. Calculations retain decimal precision until display rounding to cents.
The SEC's Investor.gov compound interest calculator similarly distinguishes an initial investment, recurring contributions, time, a rate assumption and compounding frequency. This page deliberately fixes the frequency to monthly and the deposit timing to month-end so those assumptions are visible rather than hidden behind one large final number.
Worked compound-interest examples
One starting balance and no deposits
Start with $1,000 at a nominal annual rate of 12% for one year, with no monthly contributions. The monthly rate is 1%, so the final balance is 1000 * 1.01^12, approximately $1,126.83. Modeled interest is $126.83. Simple interest of 12% on the original $1,000 would be $120; the difference arises because monthly interest also earns interest in later months.
The rate in this example is chosen to make the monthly arithmetic easy to inspect. It is not a current account offer or an expected market return. Changing the rate changes the scenario, and the tool does not assess whether any entered rate is realistically available or appropriate for a particular investment.
Regular month-end deposits
Start with zero and deposit $100 at each month-end for one year at the same nominal 12% rate. The result is approximately $1,268.25. Contributions total $1,200 and modeled interest is $68.25. The final deposit arrives at the end of month twelve and earns no interest within this period, while earlier deposits have more time to compound.
If deposits arrived at the beginning of each month instead, each would earn one additional month's interest and the result would differ. This calculator uses month-end timing consistently. Do not compare its output with a beginning-of-period model without accounting for that difference, especially when the contribution is large relative to the starting balance.
A zero-rate savings scenario
An initial $500 plus $50 deposited monthly for two years gives 24 deposits. At 0%, the final balance is 500 + 50 * 24 = $1,700. Total contributions are $1,700 and interest is zero. This check is useful for seeing how much of a future balance comes from saving rather than growth. A zero-year scenario returns the initial balance with no deposits or interest.
When to use this calculator, and when not to
Use it to understand compounding, compare contribution amounts or test how time affects a clearly stated fixed-rate scenario. Change one assumption at a time and save the inputs with the result. If you compare several rates, label them as scenarios rather than choosing the largest output as though it were a forecast.
Do not use it as a prediction of stocks, funds, cryptocurrency or another investment with variable returns. Losses, fees, taxes, contribution limits and inflation are not modeled. The SEC's introduction to investing provides broader context for evaluating investments; a growth formula alone does not assess suitability or risk.
A future dollar balance also does not state its future purchasing power. Inflation can change what the same amount buys. Withdrawals and fees change the balance path, and a tax paid each year can affect later compounding. These cannot always be corrected by subtracting one amount from the final result. Use a model that explicitly includes the relevant cash flows when those details matter.
FAQ
What is the difference between nominal rate and APY?
A nominal annual rate states the rate before compounding under a specified frequency. APY expresses an annual yield including compounding. This tool divides the nominal annual rate by twelve. Entering an APY into that field changes the intended rate assumption, so verify the label on a real account before using its advertised figure.
Are monthly deposits included in the interest figure?
No. Total contributed includes the starting balance and every scheduled deposit. Interest is the modeled final balance minus that total. Looking at both values helps distinguish saving more money from earning more growth. Neither value represents a verified statement from an actual account.
Can I use a negative rate or a withdrawal?
This version does not support them. Negative returns and withdrawals need a model that handles the resulting cash flows and any balance constraints. Entering a positive number instead would describe a different scenario. A rejected input should prompt a suitable calculation rather than changing its sign to force an answer.
Does more frequent compounding always explain a different result?
It can explain a difference when the nominal rate and other assumptions are identical, but deposit timing, rate definition, term and fees may also differ. This tool fixes monthly compounding. Compare all inputs before attributing a discrepancy to frequency alone, and avoid comparing a nominal rate with an APY as though they were the same input.
Is the projected balance guaranteed?
No. It follows mathematically from a constant rate and scheduled deposits. The calculator does not evaluate an account's terms, an issuer's reliability or an investment's future performance. Treat the output as an illustration and obtain appropriate advice before making a financial decision.
Related tools and guides
For reference only. This page does not provide financial or investment advice, an offer or a guarantee of returns.