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Investment Calculator
Use this free Investment Calculator to project the future growth of your portfolio. Simple, accurate, and easy to use for long-term planning.
Investing is the key to building long-term wealth, and the Investment Calculator is your roadmap. It helps you project how your initial capital, combined with regular monthly contributions, can grow over time given a specific rate of return.
Unlike simple savings, investments in the stock market, real estate, or mutual funds benefit from the powerful force of compounding. This tool allows you to simulate various scenarios—conservative, moderate, or aggressive—to see if you are on track to meet your financial goals.
Initial amount of money you represent.
Amount you add to your investment regularly.
How often you make contributions.
Expected annual rate of return.
Number of years you plan to invest.
How often interest is added to your balance.
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INPUT VALUES
What This Investment Calculator Does
Our Free Investment Calculator is a powerful financial planning tool designed to help you visualize the growth of your wealth over time. By leveraging the power of compound interest, this tool simulates how your initial savings and regular contributions can snowball into a significant nest egg.
Whether you are saving for retirement, a down payment on a home, or simply looking to grow your net worth, this calculator provides a clear detailed projection. It takes into account your starting principal, monthly or annual additions, the expected rate of return, and the compounding frequency to give you a precise future value estimate.
Why You Need This Tool
- visualize the Power of CompoundingAlbert Einstein famously called compound interest the "eighth wonder of the world." This tool illustrates exactly how earning interest on your interest accelerates your wealth generation, especially over long periods.
- Set Realistic Financial GoalsStop guessing. Input your target goals to see exactly how much you need to save each month. Adjust the variables to find a plan that fits your budget and lifestyle.
- Compare Investment ScenariosSee the difference between a 5% conservative return and an 8% aggressive return. Understand how increasing your monthly contribution by just $50 can change your financial future.
How to Use This Calculator (Step-by-Step)
Input the current value of your investments or savings. If you are starting from zero, enter 0.
Decide how much you can consistently add to your investment. You can choose to contribute monthly or annually.
Enter an estimated annual interest rate. For reference, the historical average return of the S&P 500 is approximately 10% (before inflation), while high-yield savings accounts might offer 4-5%.
Select the number of years you plan to let your money grow. The longer the timeframe, the more powerful the compounding effect.
Understanding the Results
The calculator provides a breakdown of your portfolio's future value:
End Balance
The total value of your investment at the end of the period, including all contributions and earned interest.
Total Principal
The actual cash amount you deposited over the years. This is your "hard work" money.
Total Interest
The "free money" earned through market growth and compounding. Ideally, this number eventually exceeds your principal.
Common Investment Mistakes to Avoid
- Ignoring Inflation: Remember that money in the future buys less than money today. If your return is 7% and inflation is 3%, your "real" return is only about 4%.
- Underestimating Time: The biggest factor in compounding is time. Starting 5 years earlier can often double your final result, even with smaller contributions.
- Being Too Conservative: While safety is important, keeping all your money in a low-interest savings account for 20 years ensures you lose purchasing power to inflation. Diversification is key.
Frequently Asked Questions
What is a good annual rate of return?
This depends on your risk tolerance. The S&P 500 has historically averaged about 10% annually over long periods. A conservative portfolio might aim for 4-6%, while aggressive portfolios might target 8-12%.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus any accumulated interest. Compounding allows your money to grow exponentially rather than linearly.
How often should I contribute to my investment?
The most important factor is consistency. Monthly contributions are popular because they align with paychecks and benefit from dollar-cost averaging, smoothing out market volatility.
Does this calculator account for taxes?
No, this is a gross investment calculator. Taxes on capital gains and dividends vary by country and account type (e.g., Roth IRA vs. Brokerage). You should subtract potential taxes from the final interest amount for a net figure.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by your annual interest rate. For example, at 8% return, your money doubles in roughly 9 years (72 / 8 = 9).
Can I lose money investing?
Yes, all investments carry risk. While savings accounts are generally insured, stocks and bonds fluctuate in value. However, over long periods (10+ years), the stock market has historically trended upwards.
When to Use This Calculator
The Investment Calculator is perfect for:
- Goal Planning: "I want to have $100,000 for a house down payment in 5 years. How much do I need to save monthly?"
- Retirement Checkup: If you have $50,000 now and save $500 a month, what will you have in 30 years?
Example Scenario
Start with $5,000. You decide to contribute $200 every month into an index fund that averages a 7% annual return.
After 20 years, your total investment (principal) would be $53,000. However, thanks to the 7% growth compounding, your investment value would be approximately $113,000. Your money effectively doubled what you put in!