Compound Interest Calculator with Monthly Contributions
Example: Starting balance: 5000 $ · Monthly contribution: 400 $ · Annual contribution increase: 3 % · Expected annual return: 7 % · Years to grow: 30 years
| Final balance | $679,979 |
| Total you contributed | $233,362 |
| Total interest earned | $446,617 |
| Times initial balance doubled | 7.09 |
Worked example
Start with $5,000, contribute $400 per month (increasing 3% each year) at a 7% annual return over 30 years. You contribute approximately $236,000 over the period. The portfolio grows to roughly $593,000 — more than $357,000 of that is interest earned, meaning compound interest contributes more than your entire out-of-pocket total. The initial $5,000 doubles about 6.5 times.
Frequently asked questions
How does compounding frequency affect growth?
This calculator uses monthly compounding (contributions made monthly, interest applied monthly). Daily compounding adds slightly more growth than monthly, but the difference is small at typical investment return rates. The compound interest formula is: A = P(1+r/n)^nt, where n is compounding periods per year. At 7% annually, monthly compounding yields 7.229% effective annual rate versus 7% with annual compounding.
What is a realistic monthly contribution?
The IRS allows up to $23,500 in 401k contributions and $7,000 in IRA contributions in 2024. At the IRA limit alone, that is $583 per month. A common rule of thumb is to aim for 15% of gross income — for someone earning $60,000 that is $750 per month. The most important factor is consistency: smaller amounts invested reliably for decades outperform larger amounts invested sporadically.
What does the annual contribution increase do?
It models raising your monthly contribution each year — by 3%, for example, you match a typical raise and keep your savings rate constant as income grows. Without step-ups, inflation erodes the real value of your fixed contribution. Even a modest 2–3% annual increase significantly raises the final balance because the larger contributions in later years have many compounding periods ahead of them.