Quick answer
This calculator estimates a future balance from a starting amount, a monthly contribution added at the end of each month, a fixed annual return and a number of years. It splits the result into money you put in and growth, compounding monthly or yearly [1].
Key points
- Compound interest is interest earned on earlier interest, not only on the money you put in.
- The calculator adds your monthly contribution at the end of each month.
- Monthly compounding applies one-twelfth of the annual return every month.
- The return you enter stays the same every year — real investments do not behave like that.
- Taxes, fees and inflation are not included, so treat the result as an illustration.
#What does this calculator show?
Investor.gov defines compound interest simply: "Compound interest is the interest you earn on interest" [1]. This tool puts numbers on that idea. You enter five things: Starting amount (money invested on day one), Monthly contribution (added at the end of every month), Annual return (a yearly percentage you choose), Years, and Compounding (monthly or yearly).
You get three results: Final balance, Total contributed (your starting amount plus every contribution), and Total growth (final balance minus total contributed). A year-by-year table shows when growth starts to outweigh contributions. The SEC runs a similar calculator on Investor.gov with the same core inputs [2].
#How does the calculation work?
Call the annual return r (written as a decimal, so 6% = 0.06) and the monthly contribution C.
- Monthly compounding: every month, new balance = old balance × (1 + r ÷ 12) + C. This repeats 12 times a year.
- Yearly compounding: once a year, new balance = old balance × (1 + r) + 12 × C. The year's contributions are added at year end, so they earn nothing until the following year.
- Total contributed = starting amount + C × 12 × years.
- Total growth = final balance − total contributed.
Because yearly mode adds a whole year of contributions at the end, it usually shows a slightly smaller balance than monthly mode for the same inputs. Neither mode is "right" — they are two simple ways to describe the same idea.
Worked example
Worked example: $5,000 plus $200 a month for 20 years
Starting amount $5,000 · Monthly contribution $200 · Annual return 6% · Years 20 · Compounding monthly. Calculated in Python with the formula above.
- Total contributed ($5,000 + $200 × 12 × 20)
- $53,000.00
- Final balance (monthly compounding)
- $108,959.20
- Total growth ($108,959.20 − $53,000.00)
- $55,959.20
- Same inputs, yearly compounding: final balance
- $104,321.10
- Same inputs, yearly compounding: total growth
- $51,321.10
With these inputs, growth makes up a little more than half of the monthly-compounding balance after 20 years.
Hypothetical fixed 6% return, before taxes, fees and inflation. Not a forecast of any investment.
| End of year | Balance | Total contributed | Total growth |
|---|---|---|---|
| 1 | $7,775.50 | $7,400.00 | $375.50 |
| 5 | $20,698.26 | $17,000.00 | $3,698.26 |
| 10 | $41,872.85 | $29,000.00 | $12,872.85 |
| 15 | $70,434.21 | $41,000.00 | $29,434.21 |
| 20 | $108,959.20 | $53,000.00 | $55,959.20 |
Total growth at the end of selected years
A quick cross-check is the rule of 72: divide 72 by the yearly return to estimate how many years money takes to double [1]. At 6%, that is about 12 years.
#What this calculator leaves out
- Taxes. Interest, dividends and gains can be taxed each year or when you withdraw, depending on the account.
- Fees. Fund expenses are taken out of your assets every year. The SEC warns that small ongoing fees "can have a major impact on your investment portfolio" over time [3]. Try the fee impact calculator to see this effect.
- Inflation. The final balance is in future dollars, which usually buy less than today's dollars.
- Changing returns. Real returns vary from year to year and can be negative. A smooth 6% every year is a teaching assumption.
#How can you use the results sensibly?
Run the same inputs at a few different returns, such as 3%, 5% and 7%, and look at the range rather than one number. Compare the total contributed with the total growth: in early years nearly all of the balance is your own money. For the ideas behind the math, read compound interest explained.
What's the bottom line?
This calculator turns compound interest into a concrete number: what you put in, and what a fixed return would add on top. The growth column shows why time matters, but the result depends entirely on a return assumption that real markets will not follow. Use it to compare scenarios, then see how fees and retirement timelines change the picture.
Frequently asked questions
When are monthly contributions added?
At the end of each month, after that month's interest has been applied. In yearly mode, the twelve contributions are added together at the end of each year.
Why is the yearly-compounding result lower?
In yearly mode the year's contributions are added at year end, so they earn nothing until the next year. Monthly mode starts compounding each contribution from the following month.
Can I enter a negative return?
The math works with any rate, but the tool is built for simple what-if comparisons. Real losses tend to come in uneven years, not as a steady negative rate.
Does the final balance include taxes or fees?
No. It is a pre-tax, pre-fee figure in future dollars. Taxes, fund expenses and inflation would all make the real result smaller.
Sources
Grade A = primary source (regulator, government agency, official rulebook or the index provider's own documents). Numbers in brackets in the text point here.
- U.S. SEC — Investor.gov. What is Compound Interest? (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. Compound Interest Calculator (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. How Fees and Expenses Affect Your Investment Portfolio – Investor Bulletin (2026). Accessed 2026-10-03.A
This page is general education, not personal financial, tax or legal advice. Figures in worked examples are hypothetical and calculated before taxes and fees unless stated. Rules and limits change; check the linked primary sources for the current version. How we check every page.
