About the Investment Calculator
Use this Investment Calculator to estimate how your money could grow over time through the power of compound interest and optional regular contributions. By adjusting your initial principal, expected annual return, compounding frequency, and contribution schedule, you can visualize different scenarios—from conservative long-term investing to aggressive, higher-return strategies. This tool is ideal for retirement planning, college funds, and general wealth-building goals.
Compounding works by earning returns not only on your original principal but also on accumulated gains. Over long horizons, small differences in contribution amounts, contribution timing, and interest rates can lead to large differences in outcomes. Experiment with annual, quarterly, monthly, or daily compounding to see how compounding frequency influences the end value. Pair that with consistent contributions to accelerate growth toward your target.
Keep in mind that expected returns are not guaranteed, and real-world results vary with market conditions, fees, and taxes. Use realistic assumptions, regularly review your plan, and consider diversifying across asset classes to balance risk and return. This calculator provides an educational projection to help you make informed financial decisions.
Key features
- Future value (FV) projection with compound interest
- Optional recurring contributions (monthly or annual)
- Adjustable compounding frequency (annual, quarterly, monthly, daily)
- Breakdown of growth due to principal, contributions, and interest
- Scenario testing for return rates and time horizons
How to use
- Enter your initial investment (principal).
- Select an expected annual return and compounding frequency.
- Add a recurring contribution per period (optional).
- Set the time horizon (years) to project growth.
- Review the projected future value and the impact of contributions.
Formula
FV = P(1 + r/n)nt + PMT × ((1 + r/n)nt − 1) / (r/n)
Variables
| Symbol | Meaning |
|---|---|
| P | Initial principal |
| PMT | Contribution per period |
| r | Annual interest rate (decimal) |
| n | Compounds per year |
| t | Years |
Examples
- Investing $5,000 upfront with $200 monthly contributions at 7% for 20 years can grow substantially via compounding.
- Increasing contributions annually (e.g., by 3%) helps offset inflation and accelerates progress toward goals.
- Higher compounding frequency can slightly improve outcomes compared to annual compounding at the same rate.
- Starting earlier—giving compounding more time—generally outperforms starting later with larger contributions.
Tips
- Use realistic long-term return assumptions; consider net-of-fees estimates.
- Stay consistent with contributions to maximize compounding benefits.
- Diversify across asset classes to balance risk and potential return.
- Review your plan periodically and rebalance if needed.
- Consider tax-advantaged accounts (where applicable) to improve net returns.