About the Investment Calculator
An investment calculator projects the future value of a portfolio from an initial amount, regular contributions, an expected return, and a time horizon. It shows how much of the eventual balance comes from your contributions and how much from growth.
The formula
FV = P(1 + r)ᵗ + C · [((1 + r)ᵗ − 1) / r]P is the initial investment, C the periodic contribution, r the periodic return, and t the number of periods. The two terms separate lump sum growth from contribution growth.
How to use this calculator
- 1Enter your Initial Investment ($). The field starts at
10000, which you can overwrite. - 2Enter your Monthly Contribution ($). The field starts at
500, which you can overwrite. - 3Enter your Expected Annual Return (%). The field starts at
8, which you can overwrite. - 4Enter your Investment Horizon (Years). The field starts at
20, which you can overwrite. - 5Read the result straight away — it recalculates as you type, so there is no button to press. Use Share to copy a link that reopens the page with your exact numbers filled in.
Worked example
| Input | Value |
|---|---|
| Initial Investment ($) | 10000 |
| Monthly Contribution ($) | 500 |
| Expected Annual Return (%) | 8 |
| Investment Horizon (Years) | 20 |
Result
Future Value: $343,778.24
Total Contributed: $130,000
Investment Gains: $213,778.24
Those are the values the page loads with, so you can reproduce this result yourself and then change one field at a time to see what drives the outcome.
Understanding your result
The split between contributions and growth flips over time. In the first decade, most of the balance is money you put in. By year twenty or twenty-five, growth typically exceeds total contributions, and by year thirty it dominates. Understanding where that crossover falls is what makes long horizons feel worth maintaining.
The expected return assumption does more work than any other input, and it is the least certain. US equities have returned roughly 10 percent nominally over the long run, around 7 percent after inflation, but with decade-long periods well above and below that. Projections at 10 percent are not wrong so much as optimistic about a specific outcome.
Things worth knowing
- Use a real return of 5 to 7 percent for equity-heavy portfolios if you want the answer in today's purchasing power.
- Fees compound against you. A 1 percent expense ratio over 30 years can cost roughly a quarter of the final balance.
- Sequence of returns matters near retirement, when a bad early year cannot be recovered by later contributions.
- Diversification does not raise expected return but substantially reduces the chance of a poor outcome.
- Automatic contributions remove the temptation to time the market, which is where most individual investors lose.
Frequently asked questions
What return should I assume?+
7 percent real or 10 percent nominal is a common long-run figure for US equities, but with wide variation over any given decade. Use a lower figure for a bond-heavy or diversified portfolio, and treat any projection as a range.
How much should I invest each month?+
A common guideline is 15 to 20 percent of gross income toward retirement, though the right figure depends on your target, your horizon, and what you have already saved. Working backwards from a goal is more useful than a percentage.
Is a lump sum better than regular contributions?+
Historically investing a lump sum immediately has outperformed spreading it out, because markets rise more often than they fall. Spreading it reduces regret risk, which is a genuine consideration even if it lowers expected return.
How much do fees really cost?+
Far more than they appear. A 1 percent annual fee on a portfolio growing at 7 percent for 30 years consumes roughly 25 percent of the final balance, because the fee compounds alongside the returns.