Investment Calculator
Project your long-term wealth. Estimate the growth of your investments and see how much they are really worth after adjusting for inflation.
Example Investment Calculation
See how a $10,000 start with $500/month contributions grows over 20 years at 8% return.
Step 1: Principal & Contributions
- FV_Principal: $10,000 × (1 + 0.08/12)^240 ≈ $49,268
- FV_Contributions: $500 × [((1 + 0.08/12)^240 - 1) / (0.08/12)] ≈ $294,510
- Total Nominal Value ≈ $343,778
Step 2: Inflation Adjustment
At 2.5% inflation, the nominal value is reduced to today's purchasing power:
$343,778 / (1 + 0.025)^20 ≈ $209,799
Summary: You invested $130,000 total. Your portfolio earned $213,778 in interest. However, because prices rise over 20 years, your $343k will only buy what $209k buys today.
Frequently Asked Questions
What is a realistic return to expect?
While the stock market historically averages 7–10% annually (S&P 500), individual results vary. Conservative planners often use 5–6% to account for market downturns and fees.
Why does compound frequency matter?
Compounding is the process of earning interest on your interest. The more frequently it happens (e.g., monthly vs. annually), the faster your balance grows over time.
How does inflation affect returns?
Inflation erodes purchasing power. A "real" return is your nominal return minus inflation. This tells you how much more "stuff" you can actually buy in the future.
Nominal vs. Real return?
Nominal return is the actual percentage gain. Real return is adjusted for inflation. If you gain 8% but inflation is 3%, your real growth in purchasing power is only 5%.
Lump sum or monthly contributions?
Historically, investing a lump sum as soon as possible is more effective because money is in the market longer. However, monthly "dollar-cost averaging" reduces risk.
What is the Rule of 72?
It's a mental shortcut to estimate when your money will double. Divide 72 by your annual return rate (e.g., 72 / 8% = doubling every 9 years).
Disclaimer: This calculator provides estimates for informational purposes only. Investment growth depends on market fluctuations, taxes, and fees. Consult a qualified professional before making financial decisions.