Work out how an investment grows with compound interest when you also add to it over time. Enter a starting amount, optional annual and monthly contributions, the rate and how often it compounds, and the term. You get the ending balance, the principal-versus-interest split, the interest earned by your initial amount versus your contributions, an inflation-adjusted buying power, and a year-by-year schedule.
Simple vs. compound interest
| $1,000 at 10% for 3 years | |
|---|---|
| Simple interest | $1,300 ($100 each year) |
| Compound interest | $1,331 ($100, then $110, then $121) |
Examples
$20,000 + $5,000/yr · 5% · annually · 5 years
A $20,000 start with $5,000 added at the beginning of each year, compounded annually at 5%, grows to $54,535.20 after 5 years — $45,000 of principal and $9,535.20 of interest. At 3% inflation that balance has the buying power of about $47,043 in today's dollars.
$10,000 + $100/mo · 6% · monthly · 10 years
A $10,000 start with $100 added at the end of each month, compounded monthly at 6%, reaches $34,581.90 after 10 years from $22,000 of principal.
Formula
Each compounding period the balance earns interest, and that interest is added back so it earns interest too. For a balance B, annual rate r, and n compounding periods per year, one period of growth is:
interest = B × (r / n) × (1 − taxRate)
B = B + contribution + interest
Buying power = Ending balance ÷ (1 + inflationRate)^years
Contributions made at the beginning of a period are added before interest is applied (earning that period's interest); contributions at the end are added after.
Assumptions and limits
The model holds the entered return, inflation, tax rate, and contribution schedule constant. Its tax field treats each period's interest as immediately taxable at one rate and does not model capital gains, qualified dividends, losses, fees, or changing rates. Results are scenarios rather than an account quote or investment forecast.