Short answer: this calculator shows what regular monthly deposits grow into when compound interest does the heavy lifting. Example: $1,000 to start plus $300 a month for 20 years at a 7% average annual return grows to $161,228 — of which only $73,000 came out of your pocket. The other $88,228 is growth. Set an inflation rate to see the same result in today’s dollars (about $89,268 at 3% inflation), check the tax option to approximate a taxable brokerage account, and use Scenario B to compare a different deposit or return side-by-side — no second calculator run needed.
Show the math
Your numbers, one step at a time. Each line is built from the same figures as the result above.
Scenario A balance Scenario B balance Total contributed (A)
| Year | Contributed | Growth | Tax paid | Balance | In today’s $ |
|---|
Educational estimate only, not financial advice. Returns are assumed to be smooth; real markets are not. Taxes are approximated as an annual charge on that year’s gains, as if gains were realized yearly; actual tax depends on your situation. Your numbers never leave this page.
Sources: FRED CPIAUCSL (CPI for All Urban Consumers, BLS) Figures last verified Report a wrong number
How this calculator works
Most compound interest calculators only take a single lump sum. This one is built around how people actually invest: a starting amount plus a deposit every month. The math, stated plainly:
- Each month, your deposit is added first, then the whole balance grows by the monthly rate (annual return ÷ 12). In formula terms, the final balance is P(1 + i)^n + M × [((1 + i)^n − 1) / i] × (1 + i), where P is your starting amount, M the monthly deposit, i the monthly rate, and n the number of months.
- Inflation adjustment: the “today’s dollars” figure divides the final balance by (1 + inflation)^years, restating it in current purchasing power.
- Optional annual tax on gains: if you check the box, each year’s gain (balance minus total contributed and previously taxed gains) is taxed at your rate and removed, approximating a taxable account where gains are realized yearly. Leave it off for an IRA or 401(k).
- Scenario B runs the same engine with its own starting amount, deposit, and return over the same number of years, with no tax or inflation adjustment, so the two plans compare cleanly.
The worked example: $300 a month for 20 years
| Amount | |
|---|---|
| Starting amount | $1,000 |
| Monthly deposit | $300 |
| Total you contribute | $73,000 |
| Assumed return | 7% per year |
| Projected balance after 20 years | $161,228 |
| Growth (money your money earned) | $88,228 |
| Same balance in today’s dollars (3% inflation) | $89,268 |
Now flip to Scenario B as prefilled — same start, $400 a month instead of $300: the balance becomes $213,625. That extra $100 a month ($24,000 of extra deposits over 20 years) produces $52,397 more at the finish, because every extra deposit compounds too. The lesson in one line: over long horizons, growth can exceed everything you put in — and small deposit increases punch far above their weight.
Year-by-year milestones for the example (Scenario A): after year 5 the balance is $23,021 ($19,000 contributed); year 10, $54,238 ($37,000 contributed); year 15, $98,492 ($55,000 contributed); year 20, $161,228. Notice how growth accelerates — more than half of all the growth arrives in the final five years.
What return should you assume?
Nobody knows future returns, and this calculator assumes a smooth rate — real markets zigzag. A common planning habit is to run 5%, 7%, and 9% and plan around the middle-to-low end. Scenario B makes that a one-screen comparison.
FAQs
Is compound interest calculated monthly or yearly here? Monthly. Deposits are added monthly and growth compounds monthly, which matches how index funds and savings accounts actually accumulate.
Why does the “today’s dollars” number look so much smaller? Because $161,228 received 20 years from now buys less than $161,228 today. At 3% inflation, prices rise about 81% over 20 years, so the future balance is restated at roughly $89,268 of today’s purchasing power.
Should I check the tax box? Only if the money sits in a regular taxable brokerage account. Inside a 401(k) or IRA, gains aren’t taxed each year, so leave it off. The tax setting is an approximation — real taxes depend on holding periods, brackets, and what you sell.
Does this work as a savings goal calculator? Yes — set the return to your savings account’s rate (for example a high-yield savings account APY), enter your monthly deposit, and the projected balance is your goal trajectory. For working backwards from a target amount and date, use our dedicated Savings Goal Calculator.
Educational content only — not financial advice. Figures are estimates based on the assumptions entered; actual results will differ. Your numbers never leave your browser.