How compound interest is calculated
The calculator divides the stated annual nominal rate by twelve and applies it monthly. A contribution is added at the end of each month. The model excludes fees, tax, inflation, changing rates and investment losses.
Example: $1,000 initially and $100 contributed every month over ten years means $13,000 in total contributions. The difference between that and the calculated ending balance is hypothetical interest.
Frequently asked questions
Are future returns guaranteed?
No. The entered annual rate is an assumption, not a forecast or guarantee.
When is the monthly payment added?
At the end of the month, after the month's interest calculation.