The future value formula explained
The future value of an investment depends on four variables: the present value (starting balance), the periodic contribution amount, the annual rate of return, and the number of compounding periods. When you compound monthly, interest is calculated twelve times per year on the growing balance, which accelerates growth compared to annual compounding.
Total contributed is simply the initial deposit plus all monthly contributions made over the time horizon. Total growth is the difference between the future value and the total contributed amount. Growth percentage expresses total growth as a proportion of total contributions, giving a sense of how much the market added relative to your own savings effort.
FV = PV x (1 + r/n)^(nt) + PMT x [((1 + r/n)^(nt) - 1) / (r/n)]
FV = future value, PV = present value (initial amount), r = annual return rate as decimal, n = compounding periods per year (12 monthly, 1 annually), t = years, PMT = contribution per period