Monthly Compound Interest Calculator

1. Choose how to enter the return: Enter a monthly return or Convert an annual return to a monthly one.
2. Enter the amount you are starting with in Initial investment. 0 is allowed.
3. Enter the rate in Monthly return or Annual return. The label and the allowed range change with the mode you picked.
4. Enter the Investment period as a whole number of months. One year is 12.
5. Choose whether to add a Monthly contribution. Selecting no contribution removes the amount field and leaves it out of the calculation.
6. Select Calculate to see the final balance, total contributed, estimated gain, cumulative return and the breakdown tables.
7. Select Reset example to restore the values shown when the page opened, or Clear to set every field to 0 and turn the contribution off.

Reset example and Clear are two separate buttons and do different things. Reset example puts back the illustration you saw first; Clear empties everything to 0 so you can start from a blank sheet.

The values shown when the page opens are a hypothetical example chosen to show how the calculation works. They are not a real product return or a market forecast. This calculator holds no return, tax or fee figures of its own.

This page uses its own monthly compounding engine, not the site’s general compound interest engine. The two follow different rules, so mixing them would change the answer. Here the period is counted in months, the breakdown is produced month by month, and an annual return is converted on an effective annual basis.

The order of events inside each month matters, and it is fixed: the month’s return is applied first, and the monthly contribution is added afterwards. Written out, each month is:

balance = balance × (1 + monthly rate) + monthly contribution

That means a contribution made in a given month earns nothing in that same month; it starts earning from the following month. A calculator that adds the contribution before applying the return would show a slightly higher balance for the same inputs, which is one reason results differ between sites.

When you choose the annual mode, the figure you enter is treated as an effective annual return and converted like this:

monthly rate = (1 + annual rate)^{1 ÷ 12} − 1

The annual return is never simply divided by 12. Dividing by 12 would give a monthly figure that compounds to morethan the annual return you entered, because each month earns on the previous month’s gains. The conversion above is built so that twelve months compound back to exactly the annual figure you typed in.

For 10% a year, the converted monthly rate is about 0.797414%, not 0.833333%. Run that for 12 months and the balance is exactly 1.1 times the starting amount. Divide 10 by 12 instead and 12 months would come out at roughly 10.47%, which is not what you asked for.

In the monthly mode nothing is converted at all: the rate you type is applied as it is, every month. Multiplying it by 12 does not give an annual return, because a full year of compounding comes out higher.

These are the same values the calculator shows when the page opens. They are a hypothetical example, not a real product return or a market forecast.

1. Initial investment 10,000, annual return 10%, investment period 12 months, no monthly contribution
2. Monthly return applied = (1 + 0.1)^{1 ÷ 12} − 1 = about 0.797414%
3. Final balance = 10,000 × 1.1 = 11,000
4. Total contributed = 10,000, estimated gain = 1,000, cumulative return = 10%

Turning the monthly contribution on and adding 300 a month changes the picture: the total contributed becomes 10,000 + 300 × 12 = 13,600, and each of those twelve payments earns for fewer months than the one before it, because the contribution lands afterthat month’s return. That is exactly what the monthly breakdown table shows, row by row.

• An initial investment of 0 is allowed. With a monthly contribution turned on, the balance simply starts from the contributions.
• A period of 0 months is allowed. Nothing has happened yet, so the balance equals the initial investment and the breakdown has a single starting row.
• A return of 0% is allowed. The balance grows only by what you put in, and the estimated gain is 0.
• Negative returns are allowed above −100%. Exactly −100% would wipe the balance out in a single month, and anything below it would make the balance negative, so neither is accepted.
• The period must be a whole number of months from 0 up to the limit shown next to the field, which is 100 years.
• When the monthly contribution is turned off, its field is not just hidden. It is removed from the calculation entirely, so a leftover value cannot affect your result.
• Empty fields, letters, negative amounts and values above the limits are not calculated, and the calculator tells you which field is wrong and why while keeping the previous result on screen.

• The return is assumed to be exactly the same every month for the whole period. Real returns move up and down.
• Each month applies the return first and the contribution second, once per month.
• An annual return is converted with (1 + annual rate)^1/12 − 1 and never divided by 12.
• A month is treated as one twelfth of a year; calendar day counts and month lengths are not used.
• Taxes are not automatically included.
• Fees are not automatically included.
• Inflation is not automatically included.
• Exchange rates are not automatically included. No currency conversion happens anywhere on this page.
• No statutory tax rate, fee rate or market return is ever guessed or applied automatically.
• Results are informational estimates based only on the values you enter.
• They do not guarantee any return and are not investment, legal or tax advice. No specific product is recommended.
• Intermediate values are not rounded; only the numbers on screen are rounded for display.
• Results may differ from other services, mostly because of the conversion rule and the order of events inside each month.
• Your inputs are calculated only in this browser and are never sent to or stored on a server.

Compounding more often does not create money out of nothing, but it does change the arithmetic, so it helps to know which question you are asking.

• Monthly compounding (this page) applies a return twelve times a year and lets you add money every month. It suits plans you think about in months.
• Annual compounding applies a return once a year. The Compound Interest Calculator takes a principal, an expected annual return and a period in years.
• Looking backwards instead of forwards is a different job. The CAGR Calculator turns a change that already happened into one equivalent annual rate.

Because this page treats an annual return as an effective rate, entering the same annual figure here and in an annual calculator gives the same balance after a whole number of years. The difference shows up in between, and whenever contributions are involved.

To plan in years rather than months, the Compound Interest Calculator takes a principal, an expected annual return and a period in years. It is a hypothetical simulation and guarantees no return.

This page looks forward from a return you choose. To look backwards at a change that already happened, the CAGR Calculator smooths it into one equivalent annual rate, and the Investment Return Calculator compares everything you got back with everything you put in. Putting a past rate into the expected return field here shows what the same pace would look like if it continued, but a past rate does not mean the same rate will continue.

• Compound Interest Calculator — the same idea over years
• CAGR Calculator — restate a past change as one annual rate
• Investment Return Calculator — see how an investment actually turned out