Compounded 12×/year
Monthly Compound Interest
The schedule mortgages, 401(k)s, and most retirement planning assume — pair it with monthly deposits for a payroll-funded account.
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Future value
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After
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Contributed
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Principal + deposits
Interest earned
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Effective APY
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Growth over time
Principal, contributions, and interest — stacked year by year.
PrincipalContributionsInterest
Year-by-year breakdown
Opening balance, deposits, interest, closing balance.
Show table
Year-by-year breakdown
Opening balance, deposits, interest, closing balance.
| Year | Opening | Net flows | Interest | Closing |
|---|
30 years at 8%, $500/month
- Total contributed$180,000
- Interest earned$565,000+
- Future value~$745,000
Interest beats contributions 3-to-1 — the compounding tail.
Why monthly
Match your cadence.
If your paycheck lands monthly and your contributions do too, use a monthly compound schedule. Modeling at a different cadence introduces rounding error that compounds along with the interest — small per year, visible over decades.
Read the formulaFAQ
Frequently asked
Why is monthly compounding the default for planning?
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Most loans, including mortgages and car loans, charge interest monthly, and retirement contributions usually come out of each paycheck. Modeling at a monthly cadence matches how the money actually moves.
How does monthly compare to annual compounding?
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At 7% nominal, monthly compounding gives 7.23% APY versus 7.00% for annual. Over 30 years, that's about 6.6% more in the final balance on a lump sum — meaningful.
Should I include my employer 401(k) match?
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Yes. Add the match to your own contribution and enter the total as the Deposit amount. If your employer matches up to 5% of your salary, work out that 5% as a monthly dollar figure and add it in.
Does this account for market volatility?
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No — compound interest math assumes a constant rate. For retirement planning you want a long-run average (7–8% nominal for US stocks). For a volatile short horizon, use a Monte Carlo tool.
Start compounding, keep compounding.
Open the calculator, change one number, and watch the long tail.