Investment Calculator
Calculate future portfolio value with compound growth and monthly contributions
How to Use This Calculator
- Enter your starting balance in Initial Investment ($).
- Specify additional regular deposits in Monthly Contribution ($).
- Enter your projected portfolio growth percentage in Expected Annual Return (%).
- Set your target investment duration in Time Horizon (Years).
- Click “Calculate Future Value” to generate total future balance, total principal deposited, and total compound interest earned.
The Formula Used
The total future value ($FV$) combines compound interest on the starting principal ($P$) and the future value of a periodic annuity ($PMT$):
Where: P = Starting Amount, PMT = Monthly Deposit, r = Annual Rate (decimal), n = Compounding Frequency, t = Years.
Frequently Asked Questions (FAQ)
What is a reasonable estimated annual rate of return?
A broad stock market index fund (like the S&P 500) has historically yielded around 7% to 10% annually before inflation over multi-decade periods. Conservative portfolios with higher bond allocations typically target 4% to 6%.
How does compounding accelerate portfolio growth?
Compounding generates interest on previously earned returns. Over time, the exponential interest component grows larger than the total principal contributed.
Does this calculator adjust for inflation?
This calculator projects nominal dollar totals. To estimate future purchasing power (real returns), subtract your expected annual inflation rate (e.g., 2.5%) from your return rate.
Why are regular monthly contributions so effective?
Monthly deposits utilize dollar-cost averaging and ensure new capital immediately begins earning compound returns every month rather than waiting for annual lump sums.