How to Use
- Enter investment amounts
Input your initial investment and monthly contribution amount.
- Set conditions
Enter the expected annual return rate (%) and investment period (years).
- View results
See the final value, total return, and year-by-year growth projection.
What Is Compound Investing With Regular Contributions?
Compound investing with regular contributions grows an initial lump sum (the principal) together with a fixed amount added every month, reinvesting the returns it earns back into the balance. This calculator combines both cash flows on a monthly compounding (12 times per year) basis to simulate your maturity value.
The key is that two growth engines work at the same time. The lump sum compounds further the longer it stays invested, while each monthly contribution earns compound interest for whatever time remains. So even for the same total amount paid in, the final figure widens significantly the earlier and longer you invest.
- Because expected returns vary by asset class, it is safer to assume a conservative rate.
- It is useful for checking, in advance, whether long-term goals such as retirement savings or building a lump sum are achievable.
Calculation Formula
A = P(1+r/n)^(nt) + PMT × [((1+r/n)^(nt) − 1) / (r/n)]
Where P = initial investment, PMT = monthly contribution, r = annual return, n = compounding periods per year (12), and t = period (years).
Example: With P = 10 million KRW, PMT = 500,000 KRW per month, r = 7%, and t = 10 years, (1+0.07/12)^120 ≈ 2.0097, so the lump sum grows to about 20.1 million KRW and the contributions to about 86.54 million KRW, for a final total of roughly 106.64 million KRW. Against the 70 million KRW paid in, that is a gain of about 36.64 million KRW (52.3%).