How the Compound Interest Calculator works
Compounding means returns can earn additional returns. Time, rate, starting principal, and ongoing deposits all affect the ending value, but regular contributions are often the input a saver controls most directly.
Method: Future value combines compound growth of the starting principal with the future value of monthly contributions.
Inputs to review
- Starting amount: Use a realistic current value and test a conservative alternative.
- Monthly contribution: Use a realistic current value and test a conservative alternative.
- Estimated annual return: Use a realistic current value and test a conservative alternative.
- Years invested: Use a realistic current value and test a conservative alternative.
How to interpret the result
Compare several return assumptions instead of relying on one projection. The contribution total separates money deposited from estimated growth, which helps prevent the future value from being mistaken for guaranteed investment performance.
Assumptions and limitations
The model uses a constant monthly rate and month-end deposits. Actual investments fluctuate and may incur fees and taxes; losses are possible.
Recalculate when rates, balances, income, goals, or time horizons change. A useful estimate is a range built from several plausible scenarios, not a single precise-looking number.