Monthly Compound Interest Calculator
Calculate growth when interest compounds every month.
What the Monthly Compound Interest Calculator does
Monthly compounding is the standard for savings accounts, mortgages and most consumer credit. Interest is added twelve times a year, so the effective annual rate sits slightly above the quoted nominal rate.
Formula
A = P × (1 + r/12)ᵐ + PMT × ((1 + r/12)ᵐ − 1) ÷ (r/12)
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Initial amount | selected currency | Yes | Accepts 0 or more. |
| Annual interest rate | % | Yes | — |
| Number of months | number | Yes | Accepts 1 or more. |
| Monthly contribution | selected currency | Optional | Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Initial amount, Annual interest rate and Number of months.
- Optionally add Monthly contribution.
- Select Calculate.
Worked example
$8,000 at 6% compounded monthly for 24 months, adding $150 a month.
- Amount
- 8000
- Rate
- 6
- Months
- 24
- Contribution
- 150
$12,832 total, of which $1,232 is interest.
Frequently asked questions
Why is the effective rate higher than the quoted rate?
Because interest credited in month one earns interest for the remaining eleven months. At 6% nominal, the effective rate is 6.168%.