With 1,000 initially saved and twelve monthly deposits of 100 at zero interest, the balance is 2,200. This boundary case is a useful check before adding a rate assumption.
Why this works
The monthly rate in this tool is the nominal annual rate divided by twelve. Deposits occur at the end of each month. The starting balance receives every month of growth; the last deposit receives no growth before the ending balance is measured.
When this answer changes
A lump sum starts earning assumed growth immediately. Monthly deposits enter over time, so applying the full-period growth factor to their total overstates the result. Beginning-of-month deposits would have one extra month of growth. Fees, taxes, changing rates, and investment losses are outside this constant-rate model.
Try your own values
Use the recurring savings calculator to test your inputs. Save two scenarios to compare results, or copy an input link to revisit your calculation.
Sources & references
- Compound Interest Calculator — U.S. Securities and Exchange Commission
