Investment Calculator

Calculate investment returns with compound interest, regular contributions, and detailed projections to plan your financial future with confidence.

Use Cases

This investment calculator is essential for retirement account planning (401k, IRA), stock portfolio projections, mutual fund growth estimates, brokerage account planning, and comparing different investment strategies.

What is an Investment Calculator?

An investment calculator projects how your money grows over time through compound interest and regular contributions. It accounts for initial deposits, recurring investments, interest rates, and time to show total returns.

Investment Growth Formula

The future value of an investment with regular contributions:

FV = PV \times \left(1 + \frac{r}{n}\right)^{n \times t} + PMT \times \frac{\left(1 + r_c\right)^{n_c} - 1}{r_c}

Where:

$FV$ = Future value of investment
$PV$ = Initial investment amount
$PMT$ = Regular contribution amount
$r$ = Annual rate of return (as decimal)
$n$ = Compounding frequency per year
$t$ = Investment time in years
$r_c$ = Rate per contribution period
$n_c$ = Total contribution periods

Math.js Expression:

initial_investment = 10000;
annual_return = 0.08;
compounding_frequency = 12;
time_years = 20;
monthly_contribution = 500;

# Future value of initial investment
fv_initial = initial_investment * (1 + annual_return / compounding_frequency)^(compounding_frequency * time_years);

# Future value of regular contributions
total_periods = time_years * 12;
rate_per_period = ((1 + annual_return / compounding_frequency)^(compounding_frequency / 12)) - 1;
fv_contributions = monthly_contribution * (((1 + rate_per_period)^total_periods - 1) / rate_per_period);

# Total investment value
total_value = fv_initial + fv_contributions;
total_value

Example Calculation

Investment Scenario:

Initial Investment: $10,000
Monthly Contribution: $500
Expected Annual Return: 8%
Investment Period: 20 years
Compounding: Monthly

Step 1: Calculate Initial Investment Growth

initial_investment = 10000;
annual_return = 0.08;
time_years = 20;
compounding_frequency = 12;

fv_initial = initial_investment * (1 + annual_return / compounding_frequency)^(compounding_frequency * time_years);
fv_initial  # $49,268.03

Step 2: Calculate Contribution Growth

monthly_contribution = 500;
total_periods = 20 * 12;
rate_per_period = ((1 + 0.08 / 12)^(12 / 12)) - 1;

fv_contributions = monthly_contribution * (((1 + rate_per_period)^total_periods - 1) / rate_per_period);
fv_contributions  # $294,510.21

Step 3: Calculate Total Value & Returns

total_value = fv_initial + fv_contributions;
total_contributions = 10000 + (500 * 240);
total_returns = total_value - total_contributions;

total_value  # $343,778.24
total_contributions  # $130,000
total_returns  # $213,778.24 (164% gain!)

Investment Return Rates by Asset Class

Asset Type	Historical Average Annual Return
S&P 500 Stocks	10-11%
Small-Cap Stocks	11-12%
International Stocks	8-9%
Corporate Bonds	5-6%
Government Bonds	3-5%
Real Estate (REITs)	9-10%
High-Yield Savings	3-4%
Money Market	2-3%

Note: Past performance doesn’t guarantee future results. Use conservative estimates for planning.

Examples

$5,000 initial +$ 200/month at 7% for 30 years = $284,166 (total contributions:$ 77,000)
$25,000 initial +$ 500/month at 8% for 20 years = $343,778 (total contributions:$ 145,000)
$1,000 initial +$ 100/month at 6% for 10 years = $17,778 (total contributions:$ 13,000)
$50,000 initial +$ 1,000/month at 9% for 15 years = $505,447 (total contributions:$ 230,000)

Investment Strategies

Dollar-Cost Averaging

Investing fixed amounts regularly regardless of market conditions reduces timing risk and averages purchase prices over time.

Time in Market vs. Timing the Market

Remaining invested long-term typically outperforms attempting to time market highs and lows. Every year invested compounds returns.

Diversification

Spreading investments across asset classes, sectors, and geographies reduces risk while maintaining growth potential.

Rebalancing

Periodically adjusting portfolio allocations maintains desired risk levels and can improve returns through systematic “buy low, sell high.”

Common Mistakes & Tips

Waiting to Invest: Delaying investment by even 5 years can cost hundreds of thousands in potential returns. Start with whatever amount you can afford.

Unrealistic Return Expectations: Using 15-20% annual returns for planning leads to disappointment. Conservative estimates (6-8%) are safer for long-term projections.

Stopping Contributions During Downturns: Market drops are buying opportunities. Continuing contributions during downturns purchases more shares at lower prices.

Ignoring Fees and Expenses: A 1% annual fee reduces 30-year returns by approximately 25%. Choose low-cost index funds and minimize trading costs.

Not Maximizing Tax-Advantaged Accounts: Prioritize 401k (especially with employer match), IRA, and HSA contributions before taxable investing.

Emotional Investing: Fear and greed drive poor decisions. Stick to your strategy through market volatility and avoid panic selling.

Frequently Asked Questions

What’s a realistic annual return for investments?

Historically, stock markets average 10% annually, but use 6-8% for conservative planning. Returns vary significantly by asset class, time period, and fees.

How much should I invest each month?

Financial advisors often recommend saving 15-20% of gross income for retirement. Start with whatever you can afford and increase contributions as income grows.

Should I invest a lump sum or dollar-cost average?

Research shows lump sum investing typically outperforms dollar-cost averaging, but DCA reduces emotional stress and timing risk for many investors.

When should I start investing for retirement?

Immediately. A 25-year-old investing $200/month at 8% reaches$ 622,000 by 65. Starting at 35 with the same contribution yields only $297,000.

How do taxes affect investment returns?

Tax-deferred accounts (401k, Traditional IRA) grow without annual taxes. Taxable accounts pay taxes on dividends and capital gains, reducing effective returns by 1-2% annually.

Can I retire early with strategic investing?

Yes. High savings rates (30-50% of income) combined with disciplined investing can enable retirement in 15-20 years through compound growth and the 4% withdrawal rule.

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Amortized Loan Calculator - Loan payment planning

Initial Principal (USD):	Currency
Annual Interest Rate (%):	%
Annual Inflation Rate (%):	%
Time Period:	yrs mo
Compounding Frequency:	Times per year (1=Annually, 4=Quarterly, 12=Monthly, 365=Daily)
Regular Contribution (USD):
Contribution Frequency:	Times per year (1=Annually, 12=Monthly, 52=Weekly)

Investment Calculator