Compound Interest Calculator With Monthly Deposits
Interested in figuring out how much money you’ll have after you save some money each month? We’ve created an easy to use Compound Interest Calculator for you.
About Compound Interest with Investments
The compound interest formula is the math behind much of what occurs in the finance world. Your car loan and home mortgage hinge upon it, and so does your savings account and any other investments. Some might be reading this with a blank expression at the words “savings account,” unresponsive due to the lack of one in their name up to this point in their lives. Alternately, there are others who will get a slightly guilty expression at those two words because of their habit of placing a certain amount in savings every month, only to drain it within the next 29 or 30 days.
For those that match one of those descriptions, pay attention because, for the sake of any goals you have, that needs to change. Compound interest is the feature of a savings account that not only allows your money to earn money, but at an ever-increasing rate. The principal, which is the amount you invest initially, sits in the account and earns interest. If it was simple interest, that would be the end of the explanation, but with compound interest, the amount of money accrued by interest is then added back into that principal amount, at which point the interest recalculates based upon the new figure.
Already, the benefit of setting money aside and keeping it there should be clear. However, if you were to take an additional amount every month and add that into the principal, then when that interest is compounded, which occurs daily with most savings accounts, then the rate of growth goes up that much higher. Even a small amount, say $25 a month, can work number toward saving for long term and shorter term goals. Use this calculator to see how much you can save up by finding an investment or account with compound interest and making monthly contributions.