# Formula to calculate compound interest with monthly contributions

Or let's say, \$100 is the principal of a loan, and the compound interest rate is 10%. After one year you have \$100 in principal and \$10 in interest, for a total base of \$110.

Monthly Compound Interest Formula. While calculating monthly compound interest you need to use basis as you have used in other time periods. You have to calculate the interest at the end of each month. And, in this method interest rate will divide by 12 for a monthly interest rate. If you want to calculate on yearly basis, Interest is 0.75%, monthly contribution is \$208.44*12, Period stays the same at 10. However if you are going to calculated on monthly basis, Interest is 0.75%/12, Monthly contribution is \$208.44 and Year should be 10*12.

This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending Dec. 1st, 2014, had an annual compounded rate of return of 8.06%, including reinvestment of ... r = the annual interest rate, as a percent n = the number of times that interest is compounded per year, e.g. 12 times per year is equivalent to compounded monthly t = the number of years the money is invested or borrowed for, in years After a year, you've earned \$100 in interest, bringing your balance up to \$2,100. If you don't touch that extra \$100, you can then earn \$105 in annual interest, and so on. To calculate compound interest, we use this formula: FV = PV x (1 +i)^n, where: FV represents the future value of the investment; PV represents the present value of the ... Chart the growth of your investments with our compound interest calculator. Control compounding frequency, add extra deposits, view charts and tabled data.

Compound interest is the total interest that includes the original interest and the interest of the new principal which is evolved out by adding the original principal to the due interest. For monthly compounded to calculate, the interest which is compounded all month in the whole year. Jul 15, 2016 · Simple Annual Compound Interest Formula An easy way to calculate the amount earned with an annual compound interest rate =Amount * (1 + %). In our below example, the formula is = A2*(1+\$B2)  where cell A2 is your initial investment (Rs. 1000) and cell B2 is the annual interest rate (7.5%) which a bank pays you. May 28, 2016 · General Compound Interest Formula (for Daily, Weekly, Monthly, and Yearly Compounding) A more efficient way of calculating compound interest in Excel is applying the general interest formula: FV = PV(1+r)n, where FV is future value, PV is present value, r is the interest rate per period, and n is the number of compounding periods. Or let's say, \$100 is the principal of a loan, and the compound interest rate is 10%. After one year you have \$100 in principal and \$10 in interest, for a total base of \$110.