How compound growth works
Each month the calculator adds the return earned on your current balance, then adds your monthly contribution. Because returns are earned on previous returns as well, growth speeds up over time, which is why starting early matters more than the amount you start with.
Example: saving 1,000 a month for 10 years
Saving 1,000 every month at a 10% annual return added monthly gives about 204,845 after 10 years: 120,000 you paid in and 84,845 of returns. Without any return you would have only 120,000 — that difference is compound growth.
How the calculator works
Each month: balance = previous balance × (1 + annual rate ÷ 12) + monthly deposit. The closed-form version is deposit × ((1 + r)n − 1) ÷ r, where r is the monthly rate and n the number of months, plus the starting amount × (1 + r)n.
The rule of 72
A quick way to see when money doubles: divide 72 by the annual rate. At 10% it doubles in about 7.2 years (about 7 years exactly with monthly compounding). Remember that inflation eats into returns: your real return is roughly the return minus inflation.
Frequently Asked Questions
What is the difference between saving and investing?
Plain saving (cash or a zero-return account) grows only by what you add. Investing aims for a return, which can grow your money faster, but returns are not guaranteed and can be negative in some years.
Should I enter a return rate if I only save cash?
No. Enter 0, and the result will simply be your starting amount plus all your monthly contributions.
Is the return compounded monthly or yearly?
The annual rate is divided by 12 and added every month, with the monthly deposit added at the end of each month — the usual method for savings plans and funds.
Should I enter a return or leave it at zero?
Leave it at zero for cash savings. For a deposit, certificate or fund, enter the expected return after any tax. For bank deposits in detail, use the fixed deposit calculator.