Chip Compound Interest
Compound Interest With Monthly Contributions
Compound interest means that growth can itself earn growth. Regular contributions add new money along the way. The result depends on the return assumption, how often it compounds, the timing of deposits and how long the money remains invested.
The Monthly Formula
For a constant monthly rate i, n whole months, starting balance P and a deposit C at each month-end: FV = P × (1 + i)^n + C × ((1 + i)^n − 1) / i. For monthly compounding of a nominal annual rate r, i = r / 12. Use rates as decimals: 6% is 0.06. At zero return, FV = P + C × n.
This simple formula covers equal monthly deposits and monthly compounding. Chip also allows contribution and compounding frequencies to differ, plus extra months. Beginning-of-period deposits receive one additional contribution period of growth.
Why Two Calculators Can Give Different Answers
- Nominal annual return and effective annual return are different inputs.
- Weekly contributions do not necessarily mean weekly compounding.
- Deposits at the start of a period grow longer than deposits at its end.
- Inflation changes purchasing power; it does not change the nominal balance.
- Rounding, partial periods and whether the starting balance is included can change a comparison.
See A Sample Report
Download a real report generated by the app from the same fictional example. It includes the assumptions, breakdown and monthly schedule.
Written by Chirag Mirani, app developer. Updated October 14, 2026. This explains the app model, not personalized investment advice.