How to use the investment calculator
- 1 Enter your starting amount and monthly contribution.
- 2 Enter your expected yearly return and the number of years.
- 3 Optionally raise contributions each year and set inflation.
- 4 Choose whether you invest at the start or end of each month and read the future value.
Worked example
$10,000 to start plus $500 a month at 7% for 20 years, invested at the end of each month. The balance grows to $300,850.72. You put in $130,000, so $170,850.72 (57%) is growth. After 10 years it is $106,639, and in today's dollars at 3% inflation the final value is $166,573.75.
Investing for the long term
- Start early: time does most of the work.
- Invest automatically every payday.
- Keep fees low with broad index funds.
- Raise contributions with every pay rise.
Use tax-advantaged accounts with the 401(k) Calculator and Roth IRA Calculator, and see how compounding works with the Compound Interest Calculator.
Features
Monthly compounding
Balance grows month by month with each contribution.
Rising contributions
Raise what you invest each year with your pay.
Today's dollars
See what the future value is worth after inflation.
When to use it
Retirement saving
Compare with your workplace plan in the 401(k) Calculator.
Choosing an account
See tax-free growth with the Roth IRA Calculator.
Dividend investing
Model income from dividends with the Dividend Calculator.
Setting a target
Work back from a goal with the Savings Goal Calculator.
Related Savings and Investing tasks
Frequently asked questions
How do I calculate investment growth?
Each month the balance earns the yearly return divided by 12, and your contribution is added. Over long periods the growth on earlier growth, compounding, becomes larger than what you put in.
What return should I expect?
The US stock market has returned about 10% a year on average over the long run before inflation, about 7% after inflation, with large swings. A mix of stocks and bonds returns less. 6% to 7% is a common cautious planning figure.
How much will $500 a month be worth in 20 years?
With $10,000 to start and $500 a month at 7%, about $300,851, of which $130,000 is money you put in and $170,851 is growth.
What is the difference between nominal and real value?
Nominal value is the dollar amount in the future. Real value, today's dollars, adjusts for inflation so you can compare it with prices now. At 3% inflation, $300,851 in 20 years buys what $166,574 buys today.
Does investing at the start of the month matter?
A little. Money invested at the start of each month earns one extra month of growth each time, which adds slightly to the result.
Should I increase my contributions every year?
Raising contributions by even 2% to 3% a year, in line with pay rises, can add a lot to the final value, because the extra money has years to compound.
Are investment returns guaranteed?
No. Stocks and funds can fall in value, especially in the short term. The calculator uses a steady average return; real returns vary from year to year.
Does this include taxes and fees?
No. Fund fees of even 1% a year reduce the final value noticeably. In a taxable account, dividends and gains are taxed; in a 401(k), IRA or Roth IRA they grow tax-deferred or tax-free.
What is the rule of 72?
A shortcut for doubling time: divide 72 by the yearly return. At 7%, money doubles in about 10 years. Try it with the Rule of 72 Calculator.
Is it better to invest a lump sum or monthly?
Historically, investing a lump sum at once has done better about two-thirds of the time because markets tend to rise, but investing monthly lowers the risk of buying just before a fall.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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