How to calculate the future value of an investment
When you invest an initial amount and also make monthly contributions, the future value is the sum of two parts: the initial amount compounding until the end of the period, and the sum of every monthly contribution, each also compounding from the date it was deposited until the end. The earlier a contribution is made, the more time it has to grow.
Formulas used
Future value: FV = P × (1 + i)^n + A × (((1 + i)^n − 1) ÷ i)
Required monthly contribution: A = (goal − P × (1 + i)^n) × i ÷ ((1 + i)^n − 1)
Time needed: n = log((goal + A ÷ i) ÷ (P + A ÷ i)) ÷ log(1 + i)
Where P is the initial amount, A is the monthly contribution, i is the monthly interest rate (annual rate divided by 12 and by 100), and n is the number of months.
Practical example
Investing $5,000 upfront plus $500 a month, at a 10% annual rate for 10 years, the final value reaches roughly $116,000, with about $65,000 coming from your own contributions and the rest from accumulated interest. That's the effect of keeping steady contributions over a long period: a meaningful share of the final result comes from interest on interest, not just the money you put in.
Why regular contributions matter so much
Beyond the initial amount compounding, each monthly contribution also starts earning as soon as it's made. That means a contribution made in month one has much more time to grow than one made in the final month of the period. This is why starting to invest early — even with small amounts — tends to matter more in the long run than waiting to invest larger amounts later.
Using the goal to plan your contribution or timeline
If you already know how much you want to have in the future (an emergency fund, a down payment, retirement), you can use the calculator two ways: fix the timeline and find out how much you need to contribute each month, or fix the contribution that fits your budget and find out how long it will take to reach the goal. Both approaches come from the same formula, just solving for different variables.
What this calculator doesn't account for
This simulation assumes a constant interest rate for the entire period, which rarely happens in practice — real investments have variable returns, and some are also subject to taxes on earnings. Treat the result as a planning estimate, not a guaranteed return.