Investment Calculator — Step-by-Step Solutions
The Investment Calculator projects how your investments grow over time using the formula FV = PV(1+r)^n + PMT x [((1+r)^n - 1) / r]. It accounts for both lump sum investments and regular monthly contributions.
Four modes cover the most common investment questions: future value of an investment, monthly contribution needed to reach a goal, time required to reach a target amount, and a side-by-side comparison of two investment scenarios. Each mode includes a year-by-year growth table and visual breakdown.
For educational purposes only. Not financial advice. Actual returns may vary.
Your calculations will appear here
How to Use the Investment Calculator
- Select a mode: Future Value, Monthly Contribution Needed, Time to Goal, or Compare Scenarios.
- For Future Value, enter your initial investment, monthly contribution, return rate, and time period.
- For Monthly Contribution Needed, enter your goal, initial investment, return rate, and time period.
- For Time to Goal, enter your goal, initial investment, monthly contribution, and return rate.
- For Compare Scenarios, enter details for two plans and see which comes out ahead.
Formula and Theory
The future value formula is FV = PV(1+r)^n + PMT x [((1+r)^n - 1) / r], where r is the periodic rate and n is the number of periods.
Compound growth means your returns generate their own returns. Over long periods, this compounding effect dominates.
The monthly rate is the annual rate divided by 12.
Historical average annual returns for the S&P 500 have been roughly 10% nominal or 7% after inflation.
Worked Examples
Example 1: Lump sum growth
Problem: Invest $10,000 at 8% for 20 years.
Solution: FV = $10,000 x (1.00667)^240 = $49,268.
Answer: $49,268
Example 2: With contributions
Problem: $5,000 initial + $500/month at 7% for 30 years.
Solution: FV of principal + contributions = $607,332.
Answer: $607,332
Example 3: Monthly needed
Problem: Reach $1M in 25 years at 8%, starting with $20,000.
Solution: Solve for PMT.
Answer: $913/month
Frequently Asked Questions
What return rate should I use?
Does this account for taxes?
Difference from compound interest calculator?
Is the return guaranteed?
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