A sample scenario is pre-filled below. Adjust any value to update the future value and Effective Annual Rate automatically.
FAQ
How do you calculate future value with compound interest?
Use FV = P × (1 + r ÷ 100 ÷ m)m × t. Monthly contributions can be added with C × ((1 + i)12t - 1) ÷ i, where i is the effective monthly rate.
What is the Effective Annual Rate?
EAR = (1 + r ÷ 100 ÷ m)m - 1. It converts periodic compounding into an annual percentage for apples-to-apples comparison.
Is this financial advice?
No. Results ignore taxes, fees, and personal circumstances. Always consult licensed professionals before investing.
How it works
Definitions
- P: initial principal (starting balance).
- r: annual percentage rate (%), m: compounding periods per year, t: years.
- C: optional monthly contribution.
Formulas
- Future value of the principal: FV = P · (1 + r/100m)m·t.
- Future value of monthly contributions C: geometric series C · ((1 + i)12t − 1)/i, where i is the effective monthly rate.
- Effective Annual Rate (EAR): (1 + r/100m)m − 1.
Example
Example check: P = 1000, r = 6%, m = 12, t = 1 ⇒ FV ≈ 1061.68 without contributions.
Notes
The model assumes a constant APR, regular compounding, and monthly contributions made at a fixed interval.
Last updated: 2025-11-28