Investment Calculator
Calculate compound interest and see how your investments can grow over time.
Starting amount to invest
Amount you'll add each month
Average annual return rate
How long you plan to invest
How often interest is calculated
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What is an Investment Calculator?
An investment calculator helps you project how much your money will grow over time using the power of compound interest. It takes into account your initial investment, regular contributions, expected rate of return, and the number of years you plan to invest.
How it Works
The core principle behind investment growth is compound interest, where you earn interest on both your principal and your accumulated interest.
*Note: This basic formula applies to a lump sum. Regular contributions require a more complex series formula.
- A = Future Value of the Investment
- P = Principal (Initial Deposit)
- r = Annual Interest Rate (decimal)
- n = Number of times interest compounds per year
- t = Number of years
Example Calculation
Let's say you start with $10,000, contribute $500 per month, earn an average annual return of 7%, and let it grow for 20 years.
Initial Investment: $10,000
Total Contributions: $500 × 12 × 20 = $120,000
Total Invested: $130,000
Annual Return: 7%
Future Value: ~$296,000
Interest Earned: ~$166,000
Frequently Asked Questions
What is compound interest?
Compound interest is 'interest on interest.' It means that every dollar of interest you earn starts earning its own interest, accelerating your wealth growth over time.
What is a good rate of return?
Historically, the stock market (S&P 500) has returned about 10% annually before inflation. A conservative estimate for long-term planning is often 6-8%.
How often should I contribute?
Consistency is key. Monthly contributions are common and allow you to take advantage of dollar-cost averaging, buying more shares when prices are low and fewer when they are high.
Does this account for inflation?
This calculator shows nominal growth. To see purchasing power (real growth), you would subtract the expected inflation rate (typically 2-3%) from your expected rate of return.
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus the accumulated interest.