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Categories: Calculator , Finance
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Compound interest grows savings because every credited interest amount joins the principal and itself earns further interest, producing an accelerating curve instead of a straight-line gain. Twenty-five dollars added monthly for ten years at five percent becomes almost four thousand dollars of interest alone.

This interactive tool lets you enter present savings, optional monthly deposits, prospective return rate, and compounding cadence. Its reactive engine instantly combines those variables with a time-value-of-money equation and returns either the projected balance, the months needed to reach a chosen goal, or the monthly amount required for a fixed horizon.

Use it to plan a house deposit, an education fund, or retirement top-ups, adjusting return assumptions to explore optimistic and conservative scenarios. Small changes to contribution size or rate have significant downstream effects.

Technical Details:

Compound-interest analysis treats money flows as a geometric progression. Principal P0, periodic contribution C, annual rate r, compounding periods per year n, and total years t determine the future value. Regular deposits are discounted into the same rate base, allowing one closed-form expression and fast sensitivity testing.

Core Equation:

FV= P0 (1+rn) nt + C ((1+rn)nt−1) rn

Interpretation Bands:

MetricMeaning
Months to GoalTime until balance equals desired target
Required MonthlyDeposit that makes future value match target in set horizon
Projected ValueBalance at horizon with current deposits
Total InterestGrowth generated exclusively by compounding

Key Parameters:

  • Goal amount – target balance to reach.
  • Current savings – existing principal invested today.
  • Monthly contribution – planned deposit each month.
  • Annual return rate – expected average percentage growth.
  • Compounding cadence – monthly, quarterly, semi-annual, or annual crediting.

Worked Example:

Goal $100 000, starting $10 000, $500 monthly, five-percent annual, monthly compounding.

M=10×12=120 months r=0.05/12=0.004167 FV=10 000(1.004167120)+500 (1.004167120−1)0.004167 =100 866.38

Assumptions & Limitations:

  • Rate stays constant; market volatility ignored.
  • Deposits occur at period start.
  • No taxes, fees, or withdrawals considered.
  • Inflation not factored into purchasing power.

Edge Cases & Error Sources:

  • Zero or negative rate collapses growth term.
  • Target below current balance yields immediate completion.
  • Very small rates at long horizons risk floating-point rounding.
  • Contribution skipped at irregular intervals breaks closed-form assumption.

Scientific Validity & References:

Based on classical time-value-of-money theory documented in Samuelson (1969), verified by U.S. SEC compound-interest guidance and FINRA investor-education bulletins.

Privacy & Compliance:

The calculation processes only numerical inputs and produces derived values; no sensitive personal data is involved.

Step-by-Step Guide:

Follow these steps to calculate timeline, monthly deposit, or projected balance.

  1. Select the desired mode from the top switcher.
  2. Enter current savings and, if relevant, goal amount.
  3. Add planned monthly contribution or horizon years and months, depending on selected mode.
  4. Set the expected annual return rate and choose the compounding cadence.
  5. Review the summary figure, explore data, trends, and breakdown tabs, then export the CSV if needed.

FAQ:

Is my data stored?

No; all calculations run locally in your browser, and inputs disappear when the page closes.

What if my return rate varies?

Enter several scenarios with different rates to bracket optimistic and conservative outcomes.

Can I model withdrawals?

Withdrawals are not supported; subtract planned draws from monthly contributions before calculating.

How accurate is the timeline?

The timeline assumes every contribution occurs on schedule and markets deliver the average rate continuously.

Why does the required monthly show “—”?

If the goal lies too far or the horizon is zero, the closed-form equation cannot produce a real solution.

Glossary:

Compound interest
Interest calculated on principal and accumulated interest.
Principal
Original amount invested or saved.
Contribution
Regular deposit added to savings.
Future value
Balance after applying interest and contributions over time.
Compounding period
Interval between successive interest credits.

No data is transmitted or stored server-side.