Compound Interest with Contributions

= + ·

Tap a term to see what it means, or .

Calculate

Example: you start with $1,000 and save another $200 every month, at 0.8% a month. How much will you have in 10 years (120 months), and how much of it is interest? Change the values to work out your own case.

Initial amount P Contribution per period A Rate per period i (%) Periods n

Step by step

What each term means

Future Value (M): The balance at the end of the n periods: the initial amount and every contribution, each with the interest of the time it stayed invested.
Initial Amount (P): What is invested at the start. It earns interest for all n periods.
Growth Factor ((1 + i)ⁿ): What $1 becomes after n periods of compound interest: each period's interest earns interest in the following ones.
Regular Contribution (A): The amount deposited at the end of each period. The first one earns n − 1 periods of interest, the last one none.
Sum of the Factors ((1 + i)ⁿ − 1): Together with the division by i, it adds up 1 + (1 + i) + (1 + i)² + … + (1 + i)ⁿ⁻¹: the growth of all the contributions. It is the sum of a geometric series with ratio 1 + i.
Rate per Period (i): The interest rate in the same unit as the periods and the contributions: monthly with monthly contributions, yearly with yearly ones.