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Investment Calculator

Calculate investment growth with compound interest and regular contributions

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Investment Return Projection Guide

An investment calculator projects future value from a starting balance, rate of return, compounding frequency, and optional contributions. It helps answer, "What will my savings be worth?" and "What must I contribute to reach a goal?"

What is Investment Calculator?

The investment calculator models balances over time, including start- vs end-of-period contributions, and converts nominal returns to real (inflation-adjusted) values for purchasing power.

How to Use the Investment Calculator

  1. Enter starting balance (P), annual rate r, compounding n, and years t.
  2. Add contributions (PMT) per period; choose start or end of period.
  3. (Optional) include an inflation rate to see real results.
  4. Calculate future value (FV), total contributions, and interest/earnings.
  5. Solve for PMT if you have a target FV.

Formulas & Methods

  • Future value (end): FV = P*(1 + r/n)^(n*t) + PMT*(((1 + r/n)^(n*t) - 1)/(r/n))
  • Start-of-period: multiply the PMT term by (1 + r/n)
  • Solve PMT (end): PMT = (FV - P*(1 + r/n)^(n*t)) * (r/n) / ((1 + r/n)^(n*t) - 1)
  • Real return (approx): 1 + r_real = (1 + r_nominal)/(1 + inflation), then - 1

Assumptions & limitations

  • Rate is an assumption; markets fluctuate.
  • Taxes and fees reduce returns; model them to get net rates.
  • Inflation adjustments are approximate.

Examples

Example A — Monthly contributions
P = $5,000, r = 7%, n = 12, t = 15, PMT = $200 (end) → FV ~ $80,600 (approx).

Example B — Solve for PMT
Goal FV = $250,000 in 20 y, P = $10,000, r = 6%, n = 12.
PMT ~ $463/mo (end-of-period).

| Setting | Impact | |---|---| | Start-of-period | Higher FV | | Higher n | Slightly higher FV | | Fees | Lower net rate | | Inflation | Reduces real FV |

Pro Tips & Best Practices

  • Use conservative rates net of fees to avoid overpromising.
  • Automate contributions to stay consistent.
  • Revisit annually to adjust for market changes and goals.
  • View real (inflation-adjusted) results to gauge purchasing power.

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FAQ

Q: How do I project investment growth?

A: Use contributions and an assumed annual rate with compounding to compute future value.

Q: What contribution timing should I pick?

A: End-of-period is standard; start-of-period earns one extra period and grows faster.

Q: How do I account for fees and inflation?

A: Subtract fees from the rate or model fee cash flows; adjust results with an inflation rate to see real value.

Q: What rate should I use?

A: Pick a conservative, long-term average net of fees that matches your asset mix.

Q: Can I solve for the contribution needed to hit a goal?

A: Yes—solve for PMT given target FV, rate, n, and starting balance.

Compliance note: This article is for information only and not financial advice.

Call to Action

Project your savings and test scenarios—then set an automatic monthly contribution to stay on track.