Compound Interest with Monthly Contributions

Starting small and adding every month? See how your deposits and compound interest combine over time.

Quick answer

Compound interest with monthly contributions grows both your starting balance and every deposit. Investing $5,000 and adding $300 a month at 7% compounded monthly for 20 years gives about $176,472. You deposit $77,000; the other $99,472 is interest. Over 30 years the same plan reaches about $406,574.

$
$
%
yrs
Future value
$176,472
Total deposits
$77,000
Interest earned
$99,472
Starting with $5,000 and adding $300 each month at 7% a year, you would have $176,472 after 20 years. You put in $77,000; the other $99,472 is interest earning interest. By the end, growth has overtaken your own contributions.

Inputs are pre-filled with the example used on this page — change any number to see your own result. Built on our compound interest calculator.

Key takeaways

  • Regular contributions usually matter more than the starting amount over long periods.
  • Time is the strongest lever: extending from 20 to 30 years more than doubles the result here.
  • Returns on real investments vary year to year; a fixed rate is a simplifying assumption.
Monthly contribution — A fixed amount added to the balance every month, which then earns compound interest for the remaining period.

Contributions vs starting balance

Without monthly contributions, the $5,000 alone grows to $20,194 in 20 years at 7%. Adding $300 a month brings the total to $176,472. The deposits themselves add $72,000, and the interest earned on them adds most of the rest. Starting early with small regular amounts is often more powerful than waiting to invest a lump sum.

Why the final years grow fastest

Each year's interest is calculated on a larger balance than the year before, so growth accelerates. In this plan, the ten years from year 20 to year 30 add about $230,000 — more than the entire balance after 20 years. The chart above shows contributions and interest separately so you can see interest take over.

Choosing a realistic rate

A high-yield savings account pays a variable rate that has usually been well below long-run stock returns, while stock returns are higher on average but uneven and can be negative in any year. Try a cautious rate as well as an optimistic one. To invest a fixed amount each month with no starting balance, see the monthly investment calculator.

Worked example

With monthly compounding at 7%, the monthly rate is about 0.5833%. The $5,000 grows to $5,000 × 1.005833^240 ≈ $20,194. The $300 deposits grow to $300 × ((1.005833^240 − 1) ÷ 0.005833) ≈ $156,278. Total: $176,472.

Methodology and sources

The starting balance compounds at the chosen frequency. Monthly contributions are added at the end of each month and grow at the equivalent monthly rate. The rate is constant and taxes, fees and inflation are not deducted, so real-world results will differ.

Sources: Investor.gov (U.S. SEC) – Compound interest calculator · Investor.gov – Compound interest (glossary)

Frequently asked questions

How much will $300 a month be worth in 20 years?

At a constant 7% compounded monthly, $300 a month alone grows to about $156,278. With a $5,000 starting balance the total is about $176,472.

Does compounding frequency matter much?

A little. More frequent compounding gives slightly higher growth at the same stated rate, but the rate and time matter far more.

Are contributions made at the start or end of the month?

This calculator assumes the end of each month. Contributing at the start of the month would earn slightly more interest.

Does this account for inflation?

No. To think in today's money, use a lower rate (return minus expected inflation) or check the result with the inflation calculator.

Results are estimates for educational purposes and are not financial advice.

Written and reviewed by Muhammad Asif, founder of CalcPane · Formulas verified by automated tests · Updated