Future Value of Monthly Contributions
Calculate how much a series of regular monthly contributions will grow over time with compound interest.
How to use this tool
- Enter monthly contribution, annual return rate, number of years and initial lump sum in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your future value and the full breakdown beneath it.
See the power of compound interest on regular savings. Even modest monthly contributions grow substantially over decades.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Future Value of Contributions = PMT × ((1 + r)n − 1) ÷ r (when r > 0)
Future Value of Lump Sum = PV × (1 + r)n
Total Future Value = FVcontributions + FVlump sum
Where r = Annual Rate ÷ 12 (monthly rate), n = Years × 12 (months), PMT = monthly contribution, PV = initial lump sum. When r = 0: FV = PMT × n + PV.
How it works
This calculator uses the standard future value of an annuity formula for end-of-period contributions combined with compound growth of an optional initial lump sum, both compounded at a monthly rate derived from the annual return. The model assumes contributions are made at the end of each month and that returns compound monthly. It does not account for taxes on gains, inflation adjustments, or varying contribution amounts over time — all of which would affect real-world outcomes.
Worked example
- Monthly contribution: $500. Annual return: 0%. Years: 1. Initial lump sum: $0.
- Monthly rate r = 0 ÷ 12 = 0. Months n = 1 × 12 = 12.
- At 0% return: FV of contributions = $500 × 12 = $6,000. FV of lump sum = $0.
- Total future value = $6,000. Total contributed = $500 × 12 + $0 = $6,000.
- Investment growth = $6,000 − $6,000 = $0.
Future value: $6,000 | Total contributed: $6,000 | Investment growth: $0
Common mistakes to avoid
- Entering an annual return rate without converting to a monthly rate -- the formula uses r = annual rate / 12, so entering 7 instead of 7/12 each month compounds to a vastly overstated result.
- Treating the future value as entirely earned interest rather than distinguishing contributions from growth, leading to unrealistic expectations about investment returns.
- Assuming end-of-month contributions when the account actually deducts at the start of the month, causing a slight underestimate of final balance.
Key terms
- Future value (FV)
- The value an investment or series of contributions will grow to at a specified date, given a rate of return and compounding frequency.
- Annuity
- A series of equal payments made at regular intervals; in finance, monthly contributions to a savings or investment account form an ordinary annuity.
- Compound interest
- Interest calculated on both the initial principal and the accumulated interest from prior periods, causing growth to accelerate over time.
- Monthly compounding
- An interest calculation schedule where interest is added to the balance each month, so each month's interest also earns interest in subsequent months.
- Lump sum
- A single one-time investment made at the start of the investment period, as opposed to recurring periodic contributions.
Frequently asked questions
- Does this assume end-of-month contributions?
- Yes, this uses the future value of an ordinary annuity (end-of-period payments). For beginning-of-month contributions, your actual result will be slightly higher.
- What return rate should I use?
- Historically, a diversified stock portfolio has returned about 7-10% annually before inflation. Use 5-7% for a more conservative, inflation-adjusted estimate.