Investment Calculator

This projects what an investment becomes over time: a starting amount, plus whatever you add each month, growing at an expected annual return. The output separates the final balance into what you contributed and what the market supplied, which is the split most worth seeing. Over short horizons contributions dominate and the return rate barely matters. Over long ones the relationship inverts, and growth on growth becomes the larger share. Where this differs from a pure compound interest calculation is in what you should assume: investment returns are not a fixed rate but a long-run average around which individual years vary enormously. A projection at 7% does not mean 7% every year — it means something closer to a plausible average across decades, with substantial losses in some of them.

How this is calculated

The initial amount grows as FV = P × (1 + r)ᵗ, where r is the annual return and t the years. Monthly contributions are treated as an annuity, with each deposit compounding for the time remaining after it is made. The two components are summed for the projected value.

Worked example: $10,000 initial, $300 a month, 7% return, 25 years. The lump sum grows to about $54,300. The contributions total $90,000 and grow to about $243,000. Projected value roughly $297,000, of which $100,000 is money you put in.

Shorten that to 10 years and the picture reverses: contributions of $36,000 against total growth of around $17,000. Time is what shifts the balance between the two.

Average return is not annual return

Broad equity markets have historically averaged somewhere around 7% to 10% a year before inflation over multi-decade periods. Individual years look nothing like that — losses above 20% and gains above 30% both occur, sometimes consecutively.

This matters because sequence risk is real. Two portfolios with identical average returns can end at very different values if one suffers its bad years while the balance is large. Regular contributions actually help here, since they buy more units when prices are low — but a projection using a smooth rate always looks tidier than the path it represents.

What the projection ignores

Fees, taxes and inflation. An annual fund fee of 1% does not sound like much, but over 25 years at a 7% gross return it removes roughly a fifth of the final balance — the fee compounds against you exactly as returns compound for you.

Taxes depend on the account and jurisdiction: tax-sheltered accounts change the outcome substantially. And every figure here is nominal, so the purchasing power of the final balance is materially lower than the number suggests. Subtract your assumptions for fees and inflation from the return rate to model the real outcome.

How to use the investment calculator

Enter your starting amount. What you have invested today. Zero is fine if you are starting from monthly contributions alone.
Set the monthly contribution. Over long horizons this usually matters more than the return rate. Try changing it first.
Choose a return rate and horizon. Use a conservative long-run figure, then subtract about 1% for fees to see a more realistic net outcome.

Frequently asked questions

What annual return should I assume?

Long-run broad stock-market returns have averaged 7–10% before inflation; bonds less. Use a conservative figure (6–7%) for planning, and remember returns are never guaranteed.

How much do fees affect the result?

More than almost anyone expects. A 1% annual fee against a 7% gross return removes roughly a fifth of the final balance over 25 years, because the fee compounds against you just as returns compound for you. The simplest way to model it is to subtract the fee from the return rate before running the projection.

Is this the same as a compound interest calculator?

The arithmetic is identical. The difference is in what the rate means: interest is contractual and known, investment return is a long-run average with severe year-to-year variation. Treat the output as a central estimate rather than a forecast.

Should I invest a lump sum or spread it out?

Historically, investing a lump sum immediately has beaten spreading it out more often than not, simply because markets rise more often than they fall. Spreading it reduces the risk of investing everything just before a decline, at the cost of some expected return. This calculator models a lump sum plus regular additions, which is what most people actually do.