How This Savings Calculator Works
With monthly compounding, future value = initial deposit × (1 + r)n + monthly deposit × (((1 + r)n − 1) ÷ r), where r is the monthly return (annual return ÷ 12) and n is the number of months. Interest earned is simply the future value minus everything you deposited — the part of the result you did not have to work for.
FV = P × (1 + r)n + PMT × (((1 + r)n − 1) ÷ r)r = annual return ÷ 12, n = months. Interest earned = FV − total deposits.
Worked example: $5,000 to start, $200 a month, 5% annual return, 10 years. Future value = $39,291.50. Total deposited = $5,000 + $200 × 120 = $29,000, so interest earned = $10,291.50 — more than a quarter of the final balance came from growth, not deposits.
Practical tips
Money moved on payday is saved; money left until month-end usually is not. The monthly deposit line above is the habit that matters most.
Starting 10 years earlier at a modest return beats starting late at a high return, because compounding needs years to do its work.
A high-yield savings account today pays a few percent; a diversified investment portfolio has averaged more but can fall. Use the return your actual account plausibly earns.
$39,291.50 in 10 years buys less than $39,291.50 today. For spending power, run the result through our Inflation Calculator too.