How the calculation works
The tool converts your effective annual return into an equivalent monthly rate. Each month, the existing balance grows at that rate, then your contribution is added. The chart separates the amount you put in from the resulting investment value.
Next balance = current balance × (1 + monthly rate) + monthly contribution
Enter annual return as a decimal in the formula: 6% becomes 0.06. A 6% effective annual return is different from a 6% nominal rate divided into twelve months.
A worked example
Start with $10,000, add $100 at the end of every month for one year, and assume a 0% return. The ending value is $11,200: $10,000 plus twelve $100 contributions. With no contributions and a 10% effective annual return, $10,000 becomes $11,000 after one year.
These examples isolate the role of contributions and growth. The actual path of investment returns can change the result when contributions occur over time.
What to change first
Try changing one input at a time. A longer horizon, larger contributions, and higher assumed returns affect the result in different ways. A return assumption is not a promise, and a smooth chart does not represent real market volatility.
Investor.gov also provides a compound interest calculator for exploring how starting amounts, contributions, time, and compounding interact.
Frequently asked questions
When are monthly contributions added?
At the end of each month, after that month’s growth. Contributions at the start of a month would have one additional month of growth.
Can I enter a negative return?
Yes, down to −99% per year. The modeled investment value can finish below the money contributed. A smooth negative rate still does not capture actual volatility.
Are these guaranteed returns?
No. All returns are hypothetical assumptions. This calculation excludes fees, taxes, inflation, and withdrawals.
Published by investor.wtf. Read the formulas, assumptions, and how these pages are made.