Investment Calculator
Project compound growth with recurring contributions, expected returns, and capital gains tax.
Parameters & Inputs
Summary & Breakdown
Portfolio Compounding Curve
About the Investment Calculator
Investing systematically harnesses the dual engines of fresh capital deposits and compound capital appreciation. Instead of timing short-term market fluctuations, dollar-cost averaging builds lasting wealth.
This investment calculator illustrates how starting principal paired with recurring monthly additions compounds over 5 to 50 years.
See how small changes in contribution rates or expected investment yields dramatically alter your future financial trajectory.
How the Calculations Work
Calculates future value combining lump-sum starting deposit and recurring monthly annuity compounding monthly.
FV = P(1 + r/12)^(12t) + PMT * [((1 + r/12)^(12t) - 1) / (r/12)]
Variables & Definitions
- P: Initial capital investment
- PMT: Regular monthly contribution
- r: Annual nominal return rate (decimal)
- t: Time horizon in years
Starting with $10,000 and depositing $500 monthly for 10 years at 8.0% annual return compounded monthly: After 10 years, total deposits equal $70,000, and interest earned equals $43,873, delivering a total balance of $113,873.
Key Terms Explained
Dollar-Cost Averaging
Investing fixed dollar amounts at regular intervals regardless of current share prices.
Capital Appreciation
The increase in market value of assets above their original acquisition price.
Asset Allocation
Distributing investments across equities, bonds, cash, and real estate to balance risk and return.
Time Horizon
The total expected duration an investor intends to hold an asset before withdrawing.
Practical Tips & Pitfalls to Avoid
Automate transfers
Automating payroll deductions directly to your investment portfolio eliminates emotional hesitation.
Keep fees low
Low-cost index funds often charge less than 0.05% in expense ratios compared to 1%+ on active mutual funds.
Stay invested during volatility
Missing the 10 best market trading days across a decade can cut overall returns in half.
Rebalance periodically
Annual portfolio rebalancing locks in gains from outperforming assets and buys underperforming assets on sale.
Frequently Asked Questions
With a $10,000 starting deposit, it compounds to approximately $113,873 ($70,000 deposits + $43,873 interest).
The S&P 500 has averaged roughly 10% nominal annual return before inflation over the past 100 years.
In equity investing, compounding occurs through reinvested dividend distributions and continuous corporate earnings growth.
Inflation reduces purchasing power. If inflation averages 3%, an 8% nominal return delivers a 5% real return.
Yes. Increasing your contributions as your income rises significantly accelerates portfolio growth.