Read a compound-interest projection correctly
Understand contribution timing, rate assumptions, and what the result leaves out.
Put it into practice
Try the tool Compound Interest · Free, with local processing.
A projection is a model
ToolMallow's Compound Interest calculator uses an annual nominal rate divided into 12 monthly periods. It assumes the same rate throughout the term. This makes scenarios comparable but does not predict actual investment performance.
Put this guide into practice with the Compound Interest. Review the tool’s inputs, example and limitations alongside your result.
Contribution timing changes the result
Regular contributions are added at the end of each month. A deposit made at the start of the month would receive an extra month of interest, so another calculator with different timing may show a different balance.
Separate deposits from interest
At zero interest, 1,000 initially plus 100 each month for 12 months becomes 2,200. The calculator shows contributed money separately from projected interest so you can see where the final figure comes from.
Compare cautious scenarios
Try different rates and monthly contributions. A constant positive rate does not represent the ups and downs of market investments. The calculator excludes taxes, fees, inflation, and changes in contributions.
Work backward from a target
Savings Goal calculates a monthly contribution under the same timing assumptions. Use it to compare illustrative plans, then check the actual terms of the savings product or investment you are considering. The result is an estimate rather than financial advice or a promised return.
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