Investment Growth Calculator
See how your investments can grow over time.
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Project Your Financial Growth
This Investment Calculator helps you visualize the potential growth of your investments over time. By entering your initial investment, regular contributions, expected annual rate of return, and the investment duration, you can see a projection of your portfolio's future value. It's a powerful tool for setting financial goals and understanding the impact of consistent investing.
The Formulas Explained
The calculator uses compound interest formulas to project growth. It calculates the future value of your initial lump sum and your ongoing contributions separately.
- Future Value of Initial Investment (PV):
FV = PV * (1 + r)^t - Future Value of Contributions (PMT):
FV = PMT * [((1 + r)^t - 1) / r](Note: These are simplified formulas; the calculator uses more precise versions that account for monthly contributions and compounding). - r: The rate of return per period.
- t: The total number of periods.
How to Use the Calculator
- Initial Amount: Enter your starting investment.
- Monthly Contribution: Enter the amount you plan to invest each month.
- Years to Grow: Specify the number of years you'll be investing.
- Annual Rate of Return: Input your estimated average annual return.
Real-World Example
You start with $5,000 and plan to invest $300 per month for 20 years. You anticipate an average annual return of 8%.
- Future Value: The calculator will show a projected total of approximately $242,500.
- Total Contributions: Your total out-of-pocket investment would be
$5,000 + ($300 * 12 * 20) = $77,000. - Total Interest Earned: The remaining
$165,500is the growth from compound interest.
Frequently Asked Questions (FAQ)
- Is the rate of return guaranteed? No. The rate of return for investments like stocks is an estimate based on historical averages and is not guaranteed. Your actual returns may be higher or lower.
- How does this differ from the Retirement Calculator? This is a more general-purpose investment growth calculator. Our Retirement Calculator is specifically framed around retirement ages and may have slightly different fields, but both use the same underlying compound interest principles.
- What about taxes and fees? This calculator does not account for investment fees or taxes on capital gains, which will reduce your final take-home amount. The projection shows the gross value of the portfolio.