How this calculator works
Interest is retained and earns interest in later periods. Each equal deposit arrives at period end, so it starts earning in the following period. Compounding and deposit frequencies match. The fixed nominal rate may be negative; taxes, fees, inflation and withdrawals are excluded. The elapsed horizon is periods divided by periods per year.
Formula
i = r/m; F = P × (1 + i)^N + C × ((1 + i)^N - 1)/i. At i = 0, F = P + N × C. Contributions = P + N × C; interest = F - contributions. r is a fraction, m periods per year, N elapsed periods and C the deposit.
Worked example
Starting with $10,000 at 6% nominal interest, compounded monthly, and depositing $100 at each month end for 120 months gives $34,581.90. Contributions total $22,000, with $12,581.90 of interest.
Advertisement
Frequently asked questions
When are deposits added?
At each period end, beginning one full period after opening. A deposit made at the start of a period would earn an extra period of interest.
Does this include RRSP or TFSA tax rules?
No. It models balances before tax and fees. Canadian account limits and tax treatment require a separate calculation.
Can interest be negative?
Yes. A negative rate reduces the balance, so interest can be negative even when contributions are positive.