fincalculatorInvestment 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.
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!
Formula & Calculation Method
Formula Used
Variable Explanation
- FV: Future Value
- P: Initial Principal
- c: Monthly Contribution
- r: Monthly Interest Rate
- n: Total Number of Months
Step-by-Step Calculation
- 1. Calculate the growth of the initial principal using compound interest.
- 2. Calculate the future value of the series of monthly contributions.
- 3. Sum both values to find the total Future Value.
- 4. Subtract the total principal invested to find the Total Interest Earned.
Interpretation Notes
This assumes interest is compounded monthly and contributions are made at the end of each month. Actual returns will vary with market performance.
How to Interpret the Results
The most critical line to look at is the Interest vs. Principal breakdown.
In the early years, most of your balance is money you put in. In later years (15+), the "Interest Earned" portion often exceeds your total contributions. This is the "crossover point" where your money is working harder than you are.
Common Mistakes
Overestimating Returns: While the S&P 500 has historically returned ~10%, using 12% or 15% in your projections can lead to dangerous overconfidence. It is safer to project with 6-8%.
Disregarding Inflation: A million dollars in 30 years won't buy what a million dollars does today. Always consider the "real" purchasing power.