What This Calculator Does
This calculator projects how much an investment could grow over time when you start with an initial lump sum and add a fixed amount every month. It combines two engines of growth: compounding on your starting balance and compounding on every monthly deposit you make. The result is the estimated future value at the end of your chosen term, plus a breakdown of how much you contributed versus how much you earned in interest.
How to Use It
Enter your initial investment (the amount you have today), your monthly contribution (what you add each month), the expected annual interest rate as a percentage, and the number of years you plan to invest. The calculator assumes monthly compounding, so the annual rate is divided by 12 and the term is multiplied by 12 to count the number of monthly periods.
The Formula Explained
The future value is the sum of two parts:
$$FV = P\,(1+r)^{n} + PMT \cdot \frac{(1+r)^{n} - 1}{r}$$
Here P is your initial principal, PMT is the recurring monthly contribution, \(r\) is the monthly rate (annual rate \(\div\) 100 \(\div\) 12), and \(n\) is the total number of months. The first term grows your lump sum; the second term is the future value of an ordinary annuity that sums the compounded value of each contribution.
Worked Example
Suppose you invest $10,000 up front, add $500 per month, earn 7% per year, and stay invested for 10 years. The monthly rate is \(0.0058333\) and there are 120 months. The lump sum grows to about $20,096, while the contributions grow to about $86,542, for a total future value near $106,638 — of which $70,000 is contributed and roughly $36,638 is interest.
FAQ
Does this account for taxes or inflation? No. It shows nominal growth before taxes, fees, or inflation. Subtract those for a real-world estimate.
Is the contribution added at the start or end of each month? The formula uses an ordinary annuity, meaning contributions are added at the end of each period.
What if the interest rate is 0%? The calculator handles this safely by simply summing your contributions plus the initial deposit.
