Monthly Compound Interest Calculator
Calculate how your savings grow with monthly compounding. Include optional monthly deposits to see the power of consistent investing.
Result
- Initial Principal
- $0.00
- Monthly Deposit
- $0.00
- Annual Interest Rate
- -
- Time Period
- -
- Total Deposits
- $0.00
- Total Interest Earned
- $0.00
- Final Balance
- $0.00
Formula & Guide
Formula
FV
Future Value (Principal Only)
FV = P(1 + r/12)^n
Principal with monthly compounding
FV
Future Value (With Deposits)
FV = P(1+r)^n + PMT×[(1+r)^n-1]/r
Including regular monthly deposits
Formula Variables
FV
Future Value
The final balance including all interest earned
P
Principal
Initial deposit amount
PMT
Payment
Regular monthly deposit amount
r
Monthly Rate
Annual rate ÷ 12 (as decimal)
n
Periods
Total number of months
Example Scenario
Initial Principal
$5,000
Monthly Deposit
$200
Annual Rate
6%
Time Period
24 months
1
Calculate Monthly Rate
- Monthly Rate = 6% ÷ 12 = 0.5% = 0.005
2
Calculate Month by Month
- Month 1: $5,000 × 1.005 + $200 = $5,225
- Month 2: $5,225 × 1.005 + $200 = $5,451.13
- ... continuing for 24 months
3
Final Result
- Total Deposits: $9,800
- Interest Earned: $514.73
Additional Examples
Savings Account
Principal: $1,000
Monthly Deposit: $100
Rate: 4% annual
Time: 36 months
Total Deposits
$4,600
Interest Earned
$296.47
Final Balance
$4,896.47
High-Yield Savings
Principal: $10,000
Monthly Deposit: $500
Rate: 5% annual
Time: 60 months
Total Deposits
$40,000
Interest Earned
$6,449.18
Final Balance
$46,449.18
Benefits of Monthly Compounding
More Frequent Growth
Interest compounds 12 times per year instead of once, leading to higher effective returns.
Perfect for Savings
Most savings accounts and CDs use monthly compounding, making this calculator ideal for planning.
Predictable Schedule
Interest is added on a fixed monthly schedule, making it easy to track and plan your savings.
Combines with Deposits
Monthly compounding pairs perfectly with monthly deposits for maximum growth potential.
Important Notes
- Monthly compounding yields higher returns than annual compounding at the same interest rate.
- APY (Annual Percentage Yield) accounts for compounding and shows your true annual return.
- Starting with even a small principal and adding monthly deposits can build significant wealth over time.
- Most banks quote APR but compound monthly, so actual returns are slightly higher than the stated rate.
Frequently Asked Questions
Common questions about monthly compound interest.