GrowthCalc › Compound Interest Calculator with Monthly Contributions
Compound Interest Calculator with Monthly Contributions: how it works
Most real saving is not a single lump sum left alone; it is a direct debit on payday. That changes the maths: the formula for a growing series of deposits is messier than A = P(1 + r/n)nt, which is why spreadsheets and calculators exist. It also changes the outcome, because each deposit gets its own compounding runway.
The preset is a plain, realistic case: nothing saved yet, $400 a month, 7 percent compounded monthly, 25 years. The result is a balance well over $300,000 from $120,000 of deposits. Change the monthly amount to see how linear the deposits are and how non-linear the growth is.
How monthly contributions are modelled
GrowthCalc simulates the account month by month. Each month it adds your contribution (at the start or end of the month, your choice) and applies the effective monthly rate for the compounding frequency you selected. That is the same approach a bank or brokerage statement follows, and it makes the year-by-year table exact rather than an approximation. The "annual contribution increase" field raises the monthly deposit each year, useful for mirroring pay rises or a plan to save more as debts are cleared.
- Start vs end of month: contributing at the start earns one extra month of interest on every deposit; over 25 years it adds about half a percent to the balance.
- Contribution increase: 3 percent a year roughly keeps your saving rate constant in real terms.
Why the deposit amount beats the return early on
In the first decade, your balance is mostly deposits; a higher monthly amount matters far more than a slightly higher return. In the last decade, the reverse is true: growth on the accumulated balance dwarfs new deposits, which is when fees and asset allocation deserve attention. The crossover is visible in the table as the year interest earned first exceeds contributions made.
Practical takeaway: automate the deposit, increase it with every pay rise, and do not interrupt it in a downturn, because the deposits made at low prices are the ones that compound the most. Educational content, not personalised advice.
Frequently asked questions
What is the formula for compound interest with monthly contributions?
Future value = P(1+i)^n + PMT × [((1+i)^n − 1) / i], where i is the periodic rate and n the number of periods, adjusted for start-of-period deposits. The calculator simulates it period by period so frequencies and increases are handled exactly.
How much will $400 a month grow to in 25 years?
At 7 percent compounded monthly, about $324,000 from $120,000 of deposits. The exact figure and the yearly path are shown above.
Should I contribute at the start or end of the month?
Start, if cash flow allows; each deposit earns one more month of interest. The difference is small per month but real over decades.
Can I export the monthly table?
Yes. Switch the table to monthly and use the CSV export in GrowthCalc Pro, or copy the summary for free.
Looking for the full guide, tips and the complete FAQ? Read the main GrowthCalc page.