OraSeparate the money you add from growth
For principal P, nominal annual rate r, m compounding periods per year and t years, balance = P × (1 + r/m)mt. Contributions require an additional accumulation term. Do not apply the no-contribution formula to the final sum of all deposits: later deposits have less time to grow.
Monthly contributions default to the end of the month; the advanced setting can move them to the beginning. A nominal rate and chosen compounding frequency are converted to an equivalent monthly growth rate for that schedule. Changing contribution timing changes the result.
Contribution timing and compounding should be compared on the same basis. The interest-model guide explains that distinction; the savings-goal calculator works backwards when you know the target but need a regular contribution.
A small compounding example
With 1,000.00, 5% nominal interest, annual compounding, three years and no contributions: 1,000 × 1.053 = 1,157.625. The displayed final balance is 1,157.63; growth is 157.63.
At the same inputs, simple interest gives 1,150.00. The comparison isolates compounding because principal, rate, term and contributions are held constant. CFPB: how compound interest works explains why accumulated interest changes the next interest amount.
A smooth curve is a scenario
A bank's fixed contractual rate and an investment's assumed return are different inputs. Markets can fall, and growth is rarely a constant amount each month. This tool does not forecast a security or estimate a probability of achieving the result.
Review fees, taxes and inflation before treating a nominal balance as future spending power. Investor.gov: investment and inflation risk explains why investment values and purchasing power can change.
Change one assumption at a time
Compare the same initial amount and contribution schedule at lower, central and higher chosen rates. Then vary the amount contributed. This makes it easier to see whether a plan depends mainly on saving more, waiting longer or assuming stronger growth.
Use the savings-goal tool when the question is how much to contribute for a target instead of how large an existing contribution schedule might become.
Common questions
Is the entered rate guaranteed?
No. It is an assumption unless a real product contract guarantees it under conditions you have checked.
When are monthly contributions added?
The default is end of month. You can choose beginning of month in the advanced settings. Irregular deposits need a dated cash-flow model.
Does the result include inflation and tax?
No. It is nominal growth before separately modeled fees, taxes and inflation.
Educational estimate using the stated assumptions. Fees, taxes, changing rates and individual circumstances can change an outcome. This is not personalized financial advice. Read the estimates disclaimer.