How this estimate is calculated

What the inputs mean

Starting amount is the balance at the beginning of year one. Deposit each period is added monthly, quarterly, twice yearly, or yearly. A zero deposit models growth of the starting amount alone.

Annual interest rate is a nominal rate held constant throughout the projection. Compounding frequency says how often interest is added; it can differ from the deposit frequency. Deposits can arrive at the beginning or end of each deposit period. Beginning-of-period deposits have one extra period of assumed growth.

The calculation

For each deposit period, the calculator turns the nominal annual rate into an effective period rate:

period rate = (1 + annual rate / compounding periods per year)^(compounding periods per year / deposit periods per year) - 1

It applies that growth to the current balance and adds the scheduled deposit before or after growth according to your selection. The next period starts with the new balance, so prior interest can itself earn interest. The displayed interest is the ending balance minus the starting amount and all deposits.

When compounding and deposits follow different schedules, the model distributes effective growth evenly across deposit periods. It does not use calendar dates or an institution's specific accrual rules.

A small example you can check

Enter $1,000 to start, $0 in deposits, 5% annually, two years, and annual compounding. After year one, the balance is $1,050. After year two, the next 5% is applied to $1,050, giving $1,102.50. Of that total, $102.50 is interest. This matches the Consumer Financial Protection Bureau's compound-interest example.

What the estimate leaves out

The projection assumes the same rate and deposit amount for the whole period. It excludes taxes, fees, inflation, changing returns, withdrawals, and exact calendar-date accrual. It is an educational scenario, not a forecast, account statement, or investment recommendation. Real investment values can fall; a negative rate in the tool lets you explore losses.

Dollar inputs must be in whole cents. The calculator keeps precision during growth and rounds amounts for display, but does not model a bank's transaction-by-transaction rounding. It refuses a projected balance above $1 trillion rather than display cents beyond its reliable range.

For an independent tool with different assumptions, compare a scenario with the U.S. Securities and Exchange Commission's Investor.gov calculator.