Guide
Contributions vs Interest Earned (How to Read Your Results)
Your final balance comes from what you started with, what you added, and what those amounts earned. Here’s how to read the breakdown and what it means.
Published: March 12, 2025 · Updated: December 21, 2025 · By FinToolSuite Editorial
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and rules vary by provider and country.
Try the calculator
See your own breakdown of principal, contributions, and interest earned.
Open the calculatorQuick answer
Final balance = principal + contributions + interest earned. Seeing the split shows whether saving or growth is doing more of the work. More on charts: compound interest chart explained.
Define the three parts
- Principal: what you start with.
- Contributions: what you add over time.
- Interest earned: the growth beyond what you put in.
Example breakdown
Principal: £1,000. Contribution: £50/month. Rate: 5% (illustrative). Time: 10 years. Compounding: monthly.
| Item | Amount (approx.) |
|---|---|
| Principal | £1,000 |
| Total contributions | ~£6,000 |
| Ending balance | ~£9,700 |
| Interest earned | ~£2,700 |
Interest earned = ending balance − principal − contributions.
How to interpret the breakdown
- If interest earned is small, the horizon or rate may be modest.
- If contributions dominate, most growth comes from saving—still valuable.
- If interest earned dominates, compounding had time/rate to work.
Link to the chart
Charts often stack contributions and interest to show which part drives growth over time. See more: compound interest chart explained.
Common confusion points
- “Interest earned” vs “interest rate” (one is a result, one is an input).
- Mixing contributions with “profit.”
- Forgetting the starting principal when counting total contributed.
Use the breakdown for planning
Run scenarios to see how more time, different monthly contributions, or rate assumptions shift the mix between saving and growth.
Open the calculatorFAQ
What counts as a contribution?
Money you add after the start, such as monthly deposits.
What is interest earned in a calculator?
It’s the growth beyond principal and contributions.
Why is interest earned small in the first few years?
Early balances are smaller and have had less time to compound.
How do monthly contributions change the breakdown?
They increase total contributions and can boost interest earned as the balance grows.
What if I withdraw money?
Withdrawals reduce the base, lowering future interest earned.
Should I include fees, taxes, inflation?
Yes, if you want a net view; these reduce the effective growth.
Why do my results differ from a bank statement?
Banks may credit interest differently or include fees. Calculator assumptions may differ from the bank’s schedule.
How do I compare two scenarios fairly?
Change one input at a time (rate, time, contribution) and compare the breakdowns.
Compare breakdowns in the tool
Run two scenarios and compare principal, contributions, and interest to see what’s driving the result.
Open the calculator