Investment Calculator
The Investment Calculator helps you project the growth of your investments over time. Enter your initial investment, regular contributions, expected return rate, and time horizon to see how your money can grow through the power of compound interest. This calculator is versatile and works for stocks, mutual funds, ETFs, real estate, or any investment with a expected return rate. It shows both the total amount invested and the total value, helping you understand how much of your final portfolio comes from investment growth versus your contributions.
Formula
Future Value = PV × (1 + r)^n + PMT × [((1 + r)^n − 1) ÷ r] PV = initial investment PMT = regular contribution r = expected annual return n = number of years Total Invested = PV + (PMT × n) Total Growth = Future Value − Total Invested
Example
If you invest $10,000 initially, add $500/month ($6,000/year), at 8% return for 20 years: FV of lump sum = $10,000 × (1.08)^20 = $46,610 FV of contributions = $6,000 × [((1.08)^20 − 1) ÷ 0.08] = $6,000 × 45.76 = $274,560 Total Future Value = $46,610 + $274,560 = $321,170 Total Invested = $10,000 + ($6,000 × 20) = $130,000 Total Growth = $321,170 − $130,000 = $191,170
How to Use
- Enter your initial investment amount
- Input your regular contribution amount and frequency
- Set your expected annual return rate (7-10% for stocks)
- Enter your investment time horizon in years
- Review your projected portfolio value and total growth
Frequently Asked Questions
What is a good expected return rate?
For stocks/S&P 500, historical average is 10% (7% after inflation). For bonds, 4-5%. For real estate, 8-10%. For a balanced portfolio (60/40), 7-8%. Use conservative estimates for planning.
How does compound interest work?
Compound interest is interest earned on both your principal and previously earned interest. The longer your money is invested, the more dramatic the growth. Starting early is more important than investing large amounts.
Should I invest lump sum or dollar-cost average?
Lump sum investing historically beats DCA about 66% of the time because markets trend upward. However, DCA reduces psychological stress and risk of investing at a market peak. Choose based on your risk tolerance.
What is the difference between this and SIP calculator?
This calculator is more general and works with any investment type. SIP calculator is specifically for Indian Systematic Investment Plans in mutual funds. The math is the same — compound interest on regular contributions.
How do taxes affect investment returns?
Taxes reduce your effective return. In tax-advantaged accounts (401k, IRA), returns compound tax-free. In taxable accounts, you pay capital gains tax (15-20% for long-term) on profits. Always factor in taxes when projecting returns.