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Investment Calculator — Investment Growth & Returns Calculator

Calculate investment growth with compound interest and regular contributions

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Investment Calculator: Portfolio Growth and Returns Calculator

Table of Contents - Investment

How to Use This Calculator - Investment

Enter your Starting Balance—your current investment portfolio value. This can be zero if you're starting fresh.

Enter your Monthly Contribution—the amount you'll add each month. Consistency matters more than size.

Enter your Expected Annual Return as a percentage. Historical stock market returns average 7-10% before inflation; use 6-7% for conservative projections.

Enter your Investment Period in years—how long until you need the money.

Select Compounding Frequency: Monthly (standard for most projections) or other intervals.

Optionally enter an Inflation Rate (typically 2-3%) to see inflation-adjusted values.

Click "Calculate" to see results. The output displays:

  • Future value in nominal dollars
  • Future value adjusted for inflation (real purchasing power)
  • Total contributions versus investment earnings
  • Return on investment percentage
  • Year-by-year breakdown showing balance, contributions, and gains

The Core Principle: Compound Growth with Contributions

Investment growth combines two powerful forces: compound returns on your existing balance and regular contributions that each start compounding.

The future value formula for investments with regular contributions: FV = P(1 + r)^t + PMT × [(1 + r)^t - 1] / r

Where P is initial investment, PMT is periodic contribution, r is periodic rate, and t is number of periods.

The first term represents growth of your initial investment. The second term represents the accumulated value of all contributions, each growing for different lengths of time.

Early contributions are worth dramatically more than later ones because they have more time to compound. A dollar invested at age 25 is worth far more at retirement than a dollar invested at age 55.

This is why financial advisors emphasize starting early, even with small amounts. Time is the most powerful variable in the equation.

How to Calculate Investment Growth Manually

Lump sum growth (no contributions): FV = P × (1 + r)^t

Example: $10,000 at 7% for 30 years FV = $10,000 × (1.07)^30 = $10,000 × 7.612 = $76,123

Monthly contributions only (no starting balance): FV = PMT × [(1 + r)^n - 1] / r

Where r = annual rate / 12, n = months

Example: $500/month at 7% for 30 years r = 0.07/12 = 0.00583 n = 360 months FV = $500 × [(1.00583)^360 - 1] / 0.00583 = $566,764

Combined (initial + contributions): Total FV = Lump sum FV + Contributions FV Example: $10,000 initial + $500/month at 7% for 30 years Total = $76,123 + $566,764 = $642,887

Inflation adjustment: Real FV = Nominal FV / (1 + inflation)^years

Example: $642,887 nominal with 2.5% inflation over 30 years Real = $642,887 / (1.025)^30 = $306,627

Contribution breakdown: Total contributions = Initial + (Monthly × Months) Example: $10,000 + ($500 × 360) = $190,000 Investment earnings = FV - Total contributions = $642,887 - $190,000 = $452,887

Real-World Applications

Retirement planning. How much will $500/month grow to in 30 years? If you need $1 million, how much must you save monthly? The calculator answers both directions.

Education savings. Starting when a child is born, what monthly contribution reaches $100,000 by age 18? At 7% return, approximately $250/month.

House down payment. Need $60,000 in 5 years? At 5% return, you need about $880/month—or $1,000/month in a savings account at 1%.

Goal feasibility. Is your retirement plan realistic? Compare projected portfolio to expected expenses (typically 25× annual spending for 4% withdrawal rate).

Catch-up planning. Started saving late? Calculate what aggressive contributions are needed to reach goals—and whether they're feasible.

Scenarios People Actually Run Into

The early start advantage. Sarah invests $400/month from age 25-35 (10 years, $48,000 total), then stops. Mike starts at 35, invests $400/month until 65 (30 years, $144,000 total). At 7%, Sarah has more at 65—$600,000 versus $567,000—despite investing one-third as much.

The inflation reality check. Your projections show $2 million at retirement. Adjusted for 2.5% inflation over 35 years, that's equivalent to $850,000 today. Still good, but not as rich as it sounds.

The fee erosion. You project $1 million at 7%. But your funds charge 1% in fees, so your effective return is 6%. At 6%, you accumulate $830,000—fees cost you $170,000.

The sequence of returns risk. The calculator assumes steady 7% returns. Reality is volatile—some years +20%, some years -15%. If bad years cluster early or late in your timeline, results differ significantly from projections.

The lifestyle inflation trap. You plan to save $500/month forever. But raises lead to lifestyle inflation—you upgrade but don't increase savings. The projection assumed increasing contributions; reality didn't match.

Trade-Offs and Decisions People Underestimate

Aggressive contribution versus comfortable living. Saving 25% of income accelerates goals but may feel constraining. Saving 10% is comfortable but may require working longer. Find your balance.

Expected return assumptions. Using 10% looks optimistic; 5% looks pessimistic. Small rate differences compound dramatically: 7% versus 8% over 30 years differs by 30%+ in final value.

Contribution timing. Contributing at month start versus month end affects results slightly. A $500 contribution at month start earns one extra month's returns—about $2 per month at 7%, adding up over decades.

Inflation rate assumptions. Historical US inflation averages 3%. Using 2% makes projections look better; 4% makes them look worse. Recent years show inflation can surprise.

Time horizon flexibility. Can you delay retirement by 2 years if markets underperform? That flexibility dramatically reduces risk. A rigid deadline creates pressure.

Common Mistakes and How to Recover

Ignoring inflation. $1 million in 30 years isn't worth $1 million today. Always calculate real (inflation-adjusted) values for goal setting.

Using unrealistic returns. 12% annual returns aren't sustainable long-term. Use 6-8% for diversified portfolios, 4-5% for conservative allocations.

Forgetting taxes. Investment gains in taxable accounts face capital gains tax. Account type (401k, IRA, taxable) significantly affects after-tax results.

Not accounting for fees. Fund expense ratios, advisor fees, and platform costs reduce effective returns. A 1% total fee on a 7% return means you keep 6%.

Linear extrapolation. The market doesn't return 7% every year—it averages 7% with significant volatility. Actual results vary, sometimes dramatically.

Related Topics

Dollar-cost averaging. Investing fixed amounts regularly regardless of market conditions. Your contributions naturally buy more shares when prices are low.

Asset allocation. How you divide investments among stocks, bonds, and other assets. Affects expected return and risk level.

Withdrawal rate. The percentage of portfolio withdrawn annually in retirement. 4% is a common guideline for sustainable 30-year withdrawals.

Tax-advantaged accounts. 401(k)s, IRAs, and similar accounts offer tax benefits that effectively increase returns. Maximize these before taxable investing.

Rebalancing. Periodically adjusting portfolio to maintain target allocation as different assets grow at different rates.

How This Calculator Works

Initial investment growth:

futureValueInitial = initial × (1 + r/n)^(n×t)

Contribution growth (future value of annuity):

monthlyRate = annualRate / 12
totalMonths = years × 12
futureValueContributions = monthly × [(1 + monthlyRate)^months - 1] / monthlyRate

Total future value:

totalFutureValue = futureValueInitial + futureValueContributions

Total contributions:

totalContributions = initial + (monthly × totalMonths)

Investment gains:

totalGains = totalFutureValue - totalContributions

Inflation adjustment:

inflationAdjustedValue = totalFutureValue / (1 + inflationRate)^years

Return on investment:

ROI = (totalGains / totalContributions) × 100

Year-by-year breakdown: For each year, calculates cumulative balance, contributions, and gains using the same formulas applied to that year's time horizon.

All calculations happen locally in your browser.

FAQs

What return rate should I assume?

For a diversified stock portfolio, 7% is reasonable after inflation, 10% before inflation historically. For balanced portfolios (60/40 stocks/bonds), use 5-6%. Be conservative for planning.

How does inflation affect my projections?

$1 million in 30 years at 2.5% inflation equals about $480,000 in today's purchasing power. Always check inflation-adjusted values for realistic goal setting.

Should I use before-tax or after-tax contributions?

Use gross contributions for tax-advantaged accounts (401k, IRA) since taxes aren't due until withdrawal. For taxable accounts, the calculation is the same, but remember gains will be taxed.

What about investment fees?

Subtract typical fees (often 0.5-1.5%) from your expected return. A 7% gross return with 1% fees is effectively 6%.

How reliable are long-term projections?

They're estimates based on assumptions. Actual results will differ due to market volatility, changing contribution levels, and economic conditions. Review and adjust plans periodically.

What's the difference between nominal and real returns?

Nominal is the raw percentage. Real is nominal minus inflation—what you can actually buy with the returns. Real returns matter for goal planning.

Can I include employer matching?

Yes—include employer contributions in your monthly amount. If you contribute $500 and employer matches 50%, use $750 monthly.

What if I miss some monthly contributions?

The calculator assumes consistent contributions. Missed contributions simply mean less total investment. You can recalculate anytime with current balance and remaining time.

How do I account for market volatility?

This calculator uses a constant return rate. Real markets fluctuate significantly. Consider running projections at optimistic (9%), expected (7%), and pessimistic (5%) rates to understand the range of possible outcomes.

Should I invest a lump sum or dollar-cost average?

Statistically, lump sum investing beats dollar-cost averaging about two-thirds of the time because markets trend upward. However, DCA reduces psychological stress and the risk of investing everything at a market peak.

How do different account types affect results?

Tax-advantaged accounts (401k, IRA) grow tax-free or tax-deferred, effectively increasing returns. A 7% return in a taxable account at 25% capital gains rate is effectively 5.25%. Maximize tax-advantaged space first.

What's the 4% rule and how does it relate to this calculator?

The 4% rule suggests withdrawing 4% of your portfolio annually in retirement for sustainable 30-year income. If you need $40,000/year, target $1,000,000 portfolio. Use this calculator to determine contributions needed to reach your target.

How do I factor in employer matching?

Add the full match to your contribution. If you contribute $500/month and your employer matches 50%, enter $750 as your monthly contribution. Free matching money dramatically accelerates growth—never leave it on the table.

What if I plan to increase contributions over time?

This calculator assumes fixed contributions. In reality, you might increase savings with raises. Run multiple scenarios: current contributions, increased contributions, and aggressive contributions to see the range of outcomes.

How do market corrections affect my long-term projections?

Market corrections (10%+ drops) occur regularly. They're temporary setbacks in long-term growth. If you continue investing during downturns, you buy at lower prices, potentially accelerating growth when markets recover. Staying the course matters more than timing the market.

Additional Notes

This calculator processes all inputs locally in your browser, ensuring privacy and instant results. For complex planning scenarios, consider consulting professionals who can account for your specific circumstances and goals.