How the compound amount is calculated
The investment period is converted to months (n), and the same monthly rate (r) is applied each month. The initial investment compounds for n months; each monthly contribution compounds from the month it is deposited until the last month. Monthly contributions are made once a month from the first month to the last, n times in total.
Use a decimal annual rate in the formulas: 7% is 0.07. At 0%, both rate conversion methods give the same result.
End-of-month deposits assume money is deposited on the last day of each month and does not earn that month's return. Start-of-month deposits assume money is deposited on the first day and earns that month's return. Only the accumulated monthly contributions are multiplied once more by (1 + r). The initial investment compounds for the same length of time in both methods.
The ÷12 method, compounded monthly, grows by slightly more than the annual return you enter over a year (the effective annual rate). The effective method sets the monthly rate so that 12 months of compounding equals exactly the annual return you enter. Each amount in the yearly table uses the same formula with n = 12 × the year number.
Example
Example: initial investment KRW 10,000,000, monthly contribution KRW 500,000, annual return 7%, investment period 10 years (120 months).
| Item | Value |
|---|---|
| Total contributions | 70,000,000 KRW |
| Monthly rate (÷12) | 0.5833% |
| Effective annual rate (÷12) | 7.23% |
| Monthly rate (effective) | 0.5654% |
| Final amount (÷12 · End of month) | 106,639,017 KRW |
| Assumed gain (÷12 · End of month) | 36,639,017 KRW |
| Return on contributions (÷12 · End of month) | 52.34% |
With the same inputs, choosing other settings changes the final amount as follows.
| Settings | Final amount |
|---|---|
| ÷12 · End of month | 106,639,017 KRW |
| ÷12 · Start of month | 107,143,848 KRW |
| Effective · End of month | 105,197,379 KRW |
| Effective · Start of month | 105,680,955 KRW |
The gap between the largest and smallest results is KRW 1,946,469. Even with the same 7%, the settings alone can make this much difference.
Why results may differ from other calculators or apps
- Annual-to-monthly conversion: Some tools divide the annual return by 12, while others derive the monthly rate from an effective annual rate. Even 7% gives different results, so match the ‘Annual-to-monthly rate conversion’ setting above when comparing.
- Timing of the first deposit: This calculator assumes deposits every month starting in the first month, at either the end or the start of the month. Some tools start contributions in the second month or assume one deposit per year, which changes the result.
- Taxes, fees and inflation: Dividend tax, capital gains tax, trading fees, fund expenses and inflation are not included. The amount you actually receive and its purchasing power may be lower.
- Returns are not constant: Actual stock and ETF returns change from year to year and month to month, and some years have losses. This calculator shows the arithmetic result of assuming the return you enter stays the same for the whole period.
Related calculators
To check the profit or loss on a stock you actually bought, use the Stock return calculator — profit/loss and return. To see the dividends on your holdings, use the Dividend calculator.
Basis, data and updates
Calculations use only the values you enter; no market prices or historical return data are loaded. The same inputs always give the same result. Amounts are rounded to the nearest won only when displayed, after all calculations. Formula and wording changes are listed below.
- 2026-10-08 · Added simple-interest comparison using the same monthly rate and deposit timing, and guidance on dividend yield and dividend growth.
- 2026-10-07 · First release (compounding of initial investment and monthly contributions, end- or start-of-month deposits, ÷12 vs effective conversion comparison, yearly table).
Frequently asked questions
- Can I enter dividend yield or dividend growth as the annual return?
- Dividend yield is dividends relative to the share price; dividend growth is the increase in the dividends themselves. Neither is the overall investment return. This calculator does not model dividend payments or reinvestment separately. If your assumed total return already includes dividends, do not add dividend yield again.
- What is the difference between ‘Annual return ÷ 12’ and ‘Convert from effective annual rate’?
- ‘÷ 12’ compounds the annual return divided by 12 every month, so the actual growth over a year is slightly higher than the input (about 7.23% for 7%). ‘Convert from effective annual rate’ sets the monthly rate so that 12 months of compounding equals the annual return you enter (about 0.5654% a month for 7%). With a positive return, ‘÷ 12’ gives the larger result.
- How do end-of-month and start-of-month deposits differ?
- Both make one deposit every month from the first month to the last. Start-of-month deposits also earn that month's return, so with a positive return the result is slightly higher than with end-of-month deposits.
- Are taxes, fees and inflation included?
- No. Dividend tax, capital gains tax, trading fees, fund expenses and inflation are not included. Only growth at the return you enter is calculated, so the amount you actually receive may differ.
- Will my investment actually grow by this much?
- Not necessarily. Actual stock and ETF returns change every year, and losses are possible. This calculator only shows the arithmetic result of assuming the return you enter continues unchanged for the whole period. It does not forecast future returns or solicit any particular investment.