Compound interest calculator with monthly contributions
Free compound interest calculator that handles both your starting amount and recurring monthly deposits. See exactly how regular contributions + compounding build wealth.
Why monthly contributions matter more than starting amount
Two scenarios at 8% annual return for 30 years:
- $50,000 initial, $0/month: grows to $503,000
- $0 initial, $500/month: grows to $745,000
Starting with zero but contributing $500/month beats a $50,000 lump sum with no contributions — by $242,000. Monthly contributions compound over the full timeline, while the initial amount only compounds once. Consistency beats size.
The compound interest + contribution formula
Most online "compound interest calculators" only handle the principal. Real-world investing needs both formulas combined:
Principal growth: A = P × (1 + r/n)^(nt)
Contribution growth: FV = PMT × [((1 + r/n)^(nt) − 1) / (r/n)]
Total final value: sum of both. Our calculator above does this math automatically — drag the sliders and watch.
How to use this calculator for real scenarios
401(k) with employer match
Initial: current 401(k) balance. Monthly: your contribution + employer match. Rate: 7-9% for balanced target-date funds. Years: until retirement.
Roth IRA contributions
Initial: current Roth balance. Monthly: up to $583/month ($7,000/year 2025 limit). Rate: your investment mix — 8-10% for all-stock, 6-7% for balanced.
Taxable brokerage account
Same inputs, but remember returns are taxed. Reduce your rate by 0.5-1% to approximate tax drag on dividends and short-term gains.
High-yield savings account
Initial: current balance. Monthly: automatic transfers from checking. Rate: your APY (currently 4-5% for top HYSAs). Years: time until you need the money.
Compounding frequency: monthly vs quarterly vs annual
At 8% nominal rate over 30 years with $500/month contributions:
- Annual compounding: $679,000 final
- Quarterly compounding: $724,000 final
- Monthly compounding: $745,000 final
- Daily compounding: $753,000 final
The difference between annual and daily is ~11%. Most investment products compound either monthly (mutual funds, index funds) or daily (savings accounts). For simplicity, use monthly as your default.