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Compound Interest with Monthly Deposits Calculator

Grow savings with monthly deposits

How it is calculated

Interest is compounded monthly. With annual rate rate in percent, r = rate / 100 / 12 and n = years × 12 months:

balance = P × (1 + r)n + PMT × ((1 + r)n − 1) / r

P is the starting amount and PMT the deposit made every month. The formula treats each deposit as made at the end of its month, so the first deposit earns interest from month two. Total deposited is P + PMT × n, and interest earned is the balance minus that figure. At a 0 % rate the deposits are simply added up. Rate cannot be negative and years must be above zero. Inflation, taxes and fees are not included.

Worked example

Start with 5000, add 200 a month for 10 years at 6 % a year.

  1. r = 0.06 / 12 = 0.005 and n = 120
  2. Starting amount grows to 5000 × 1.005120 ≈ 9,096.98
  3. Deposits grow to 200 × (1.005120 − 1) / 0.005 ≈ 32,775.87
  4. Balance ≈ $41,872.85; deposited = 5000 + 200 × 120 = $29,000.00

Interest earned is $12,872.85.

Try this example →

Common mistakes

  • Entering the monthly rate (0.5) as the annual rate: the field takes the annual percentage, and the tool divides by 12 itself.
  • Entering months in the years box: 120 there would model 120 years.
  • Assuming a deposit at the start of each month: here deposits fall at the end of the month, so a start-of-month plan earns slightly more than shown.
  • Treating the balance as spending power: it is a nominal amount, and inflation, tax and fees on the account will reduce what it is worth.
  • Using a rate that is not really guaranteed: the result is only as realistic as the return you assume.

About this calculator

This calculator combines two growth streams: compound interest on the starting balance, FV₁ = P × (1 + r/12)^(12t), and a stream of monthly contributions, FV₂ = PMT × [((1 + r/12)^(12t) − 1) / (r/12)] — the future value of an ordinary annuity. Adding them gives the total ending balance, from which subtracting your original balance and total deposits isolates the interest actually earned.

It's the calculation behind "pay yourself first" savings plans and retirement projections, letting savers see concretely how a modest but consistent monthly deposit — $200 a month, say — compounds into a much larger sum than the deposits alone would add up to, especially over a decade or more.

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