Investing BasicsCalculator
Compound growth calculator
See how a starting amount and monthly additions could grow at an assumed rate. Shows the formula, a worked example and the limits of any projection.
Compound growth calculator
Result
- Ending balance
- —
- Money you put in
- —
- Growth from compounding
- —
Quick answer
Enter what you start with, what you add each month, an assumed yearly rate and the number of years. The calculator adds each month's growth to the balance and shows how much of the ending total is your own money and how much is compounding.
How do you use this calculator?#
Type a starting amount, a monthly addition (or 0), an assumed yearly rate and the number of years. Choose whether growth is added monthly or yearly. The result updates as you type. The rate is your assumption — savings accounts and bonds quote a rate, but stocks and funds do not have one, and their returns vary from year to year.
How is the result calculated?#
Compound interest is interest earned on principal and on interest already earned[1]. With monthly compounding, each month the balance grows by one-twelfth of the yearly rate and then your monthly addition is added. With yearly compounding, the balance grows by the full rate once a year and twelve monthly additions are added at the end of the year. The SEC's own calculator asks for similar inputs, including the compounding frequency[2].
- Monthly: balance = balance × (1 + rate ÷ 12) + monthly addition, repeated 12 times a year.
- Yearly: balance = balance × (1 + rate) + 12 × monthly addition, once a year.
- Money you put in = starting amount + monthly addition × 12 × years.
- Growth from compounding = ending balance − money you put in.
What does a worked example look like?#
Worked example
$10,000 plus $200 a month at 6% for 20 years
With monthly compounding the ending balance is $125,510.22. You put in $58,000 ($10,000 + $200 × 12 × 20), so $67,510.22 came from compounding. With yearly compounding the same inputs give $120,356.77.
| Year | Balance (monthly compounding) |
|---|---|
| 5 | $27,442.51 |
| 10 | $50,969.84 |
| 15 | $82,704.68 |
| 20 | $125,510.22 |
Figures computed in code from the stated inputs; rounded to the nearest cent or tenth.
Notice that the balance roughly doubles between year 10 and year 20 even though you add the same $2,400 every year. That is the pattern explained in how compound interest works.
What does this calculator leave out?#
- Fees. A yearly fee compounds against you — try the fee drag calculator.
- Inflation. The result is in future dollars. The inflation-adjusted return calculator converts it to today's money.
- Taxes, which depend on your country and account type.
- Ups and downs. A steady rate hides the losses real markets have in some years.
What mistakes do beginners make?#
Picking one rate and trusting it
Try a cautious, middle and hopeful rate. The spread between them is the honest answer.
Ignoring what you put in
Check the 'money you put in' line. Early on, most of the balance is your own contributions, not growth.
What else do beginners ask?#
What rate should I use?
There is no correct rate. For a savings account or bond, use its quoted rate. For anything that goes up and down, try several rates to see a range, and treat every result as an illustration.
Why does monthly compounding give a bigger number?
Growth is added to the balance more often, so later months earn on a slightly larger base. In the worked example above, monthly compounding ends $5,153.45 higher than yearly compounding after 20 years ($125,510.22 vs $120,356.77).
Sources
Numbers in brackets in the text point here. Grade A = primary source (regulator, statistics agency, law or official document).
- 1
- 2