ClarityHow to use this tool
- Enter starting balance, monthly contribution, annual interest rate, time period.
- Select Calculate to view the result.
- Check the method and assumptions below before using the result.
The method, explained
Each month: new balance = previous balance × (1 + annual rate ÷ 1200) + contribution. Contributions are added at the end of each month.
Start with 1,000, contribute nothing, and use 12% nominal annual interest for one year. Monthly compounding gives 1,126.83, including 126.83 interest.
What to keep in mind
The interest rate stays constant. This model excludes taxes, fees and inflation, and does not guarantee an investment return. All money inputs must use the same currency.
Reference: Investor.gov savings calculator
Common questions
Are contributions added before interest?
No. Each month earns interest first; your contribution is then added at month end. Beginning-of-month contributions would grow slightly more.
Is the annual rate the same as APY?
No. Enter a nominal annual rate. Monthly compounding creates an effective annual yield of (1 + rate/12)^12 − 1.
Methodology maintained by ClarityKit. How these tools are built and checked.