Investment Calculator
Calculate the future value of your investment with regular monthly contributions and compound interest. View a detailed yearly breakdown of your investment growth. See also Compound Interest Calculator and ROI Calculator.
How to Use the Investment Calculator
Enter your initial investment amount, monthly contribution, expected annual return rate, and investment time horizon. The calculator computes the future value using compound interest, showing how your money grows over time. The yearly breakdown table shows exactly how much you contribute each year versus how much interest you earn, demonstrating the power of compounding — where interest earned in earlier years generates additional interest in later years.
Investment Growth Formula
FV = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)]
Where:
FV = Future Value
P = Initial investment (principal)
PMT = Monthly contribution
r = Annual return rate (decimal)
n = Compounding frequency per year
t = Time in years
Example Calculation
Initial Investment: $10,000
Monthly Contribution: $500
Annual Return: 8%
Time Period: 10 years
Compound Frequency: Monthly
Total Contributions: $10,000 + ($500 × 120) = $70,000
Future Value: ≈ $112,953
Total Interest Earned: ≈ $42,953
Investment Growth Reference Table
| Initial | Monthly | Rate | 10 Years | 20 Years | 30 Years |
|---|---|---|---|---|---|
| $10,000 | $500 | 6% | $95,124 | $243,399 | $520,927 |
| $10,000 | $500 | 8% | $112,953 | $335,737 | $838,620 |
| $10,000 | $500 | 10% | $134,310 | $462,041 | $1,316,614 |
| $25,000 | $1,000 | 7% | $228,035 | $573,595 | $1,249,017 |
| $50,000 | $0 | 8% | $109,357 | $239,456 | $524,433 |
| $0 | $1,000 | 8% | $184,166 | $592,947 | $1,490,360 |
Frequently Asked Questions
What annual return rate should I use?
The S&P 500 has historically returned about 10% annually (7% after inflation). Bond funds typically return 4-6%. A balanced portfolio might average 7-8%. Use a conservative estimate for planning — it's better to be pleasantly surprised than disappointed.
How does compounding frequency affect returns?
More frequent compounding produces slightly higher returns. Daily compounding earns more than monthly, which earns more than annually. However, the difference is relatively small. The biggest factor in investment growth is time and consistent contributions, not compounding frequency.
Should I invest a lump sum or dollar-cost average?
Historically, lump-sum investing outperforms dollar-cost averaging about two-thirds of the time because markets tend to go up. However, dollar-cost averaging (regular monthly contributions) reduces the risk of investing at a market peak and is psychologically easier for most people.
Does this calculator account for taxes and fees?
No. This calculator shows gross returns before taxes and fees. In reality, investment returns are reduced by management fees (typically 0.03-1% annually for index/mutual funds) and taxes on gains. Tax-advantaged accounts (401k, IRA) can defer or eliminate taxes on growth.
What is the difference between this and the compound interest calculator?
Both use the same underlying math. The investment calculator is framed for investment planning with features like yearly breakdown tables showing deposits vs interest. The compound interest calculator focuses more on the mathematical concept of compounding.