Investment calculator

How this investment calculator works

This calculator uses the standard future value of a series formula: FV = PV × (1 + r)ⁿ + PMT × ((1 + r)ⁿ − 1) / r. Enter your starting balance, monthly contribution, expected annual return and time horizon, and it instantly shows what your portfolio could be worth in the future.

The calculation assumes returns compound annually and contributions are made at the end of each month. Your actual results will differ based on market performance, fees, taxes and the timing of your contributions. Use this as a planning tool — not a guaranteed forecast.

Worked example: $10,000 start, $500/month, 7%

Over a 20-year horizon at a 7% annual return:

• Starting balance grows to: $10,000 × 1.07²⁰ = $38,697
• Monthly contributions grow to: $6,000/year × ((1.07²⁰ − 1) ÷ 0.07) = $245,973
• Total contributed: $10,000 + ($500 × 12 × 20) = $130,000
• Future value: $284,670
• Growth (returns, not deposits): $154,670

Growth outweighs contributions by a wide margin here — 54% of the final portfolio came from returns rather than money you put in.

Compound growth explained

Compound growth is the engine behind long-term investing. When your investment returns generate their own returns, growth accelerates over time. The earlier you start, the more pronounced the effect becomes — which is why time in the market matters more than timing the market.

For example, a $10,000 investment growing at 7% annually becomes $19,671 after 10 years without any additional contributions. Over 30 years at the same rate, that same $10,000 grows to $76,122 — the last decade alone adds more than the first two decades combined. Adding regular monthly contributions multiplies this effect dramatically.

Portfolio value over time

Same $10,000 start and $500/month at 7%, at different horizons:

Years	Total contributed	Growth	Portfolio value
5	$40,000	$8,530	$48,530
10	$70,000	$32,570	$102,570
15	$100,000	$78,364	$178,364
20	$130,000	$154,670	$284,670
25	$160,000	$273,769	$433,769
30	$190,000	$452,887	$642,887

Growth overtakes contributions somewhere between year 15 and 20 — after that, the portfolio is earning more each year than you're putting in.

The impact of fees

Fees are one of the most overlooked factors in investment growth. Even a 1% difference in annual fees can reduce your final portfolio by tens or hundreds of thousands of dollars over a long time horizon. A fund charging 0.75% versus one charging 0.05% may seem negligible, but over 30 years the compounding effect of those fees is enormous.

Same $10,000 + $500/month over 20 years, with a 7% gross return reduced by the annual fee:

Annual fee	Net return	Portfolio after 20 years	Cost of fees
0.05% (index fund)	6.95%	$282,971	—
0.50%	6.50%	$268,188	$14,783
1.00% (active fund)	6.00%	$252,785	$30,186

A 1% fee instead of a 0.05% one costs over $30,000 on a $130,000 investment — roughly 23% of everything you contributed, lost to fees.

Always check the expense ratio on any fund you invest in. Index funds and ETFs typically have the lowest fees, often below 0.10% annually, while actively managed funds can charge 1% or more. The Bogleheads approach of low-cost, diversified index investing has consistently outperformed most active strategies after fees.

Diversification benefits

Diversification — spreading your investments across different asset classes, sectors and geographies — reduces portfolio risk without necessarily sacrificing returns. When one part of the market is down, another may be up, smoothing out your overall returns over time.

A well-diversified portfolio typically includes a mix of domestic and international stocks, bonds, and possibly real estate or commodities. The exact balance depends on your risk tolerance and time horizon. Younger investors with decades until retirement can afford more stock exposure, while those nearing retirement may shift toward bonds for stability.

What this calculator does not include

• Fees — enter your expected return after fees to account for them, or see the fee table above for the scale of the impact.
• Tax — capital gains and dividend tax depend on your account type and country. Tax-advantaged accounts like a Roth IRA or ISA change the outcome substantially.
• Inflation — figures are nominal. At 3% inflation, $284,670 in 20 years has roughly the purchasing power of $157,600 today.
• Market volatility — this assumes a smooth annual return. Real markets have losing years, and the sequence of returns matters if you're drawing money out.

Frequently asked questions

What return should I expect on my investments?

Historical average annual returns for a diversified stock portfolio are around 7-10% before inflation. Bonds typically return 2-5%. Your actual returns will vary. A conservative estimate of 5-7% is often used for long-term planning.

How does compounding work in investing?

Compounding means your investment earnings generate their own earnings over time. When you leave dividends and capital gains reinvested, the base you earn returns on grows larger each year, creating exponential growth the longer your time horizon.

What is dollar-cost averaging?

Dollar-cost averaging is investing a fixed amount at regular intervals regardless of market conditions. This removes the stress of timing the market and naturally buys more shares when prices are low and fewer when prices are high.

Should I use a lump sum or dollar-cost average?

Historically, investing a lump sum as early as possible has outperformed dollar-cost averaging about two-thirds of the time, because markets tend to rise over the long term. However, DCA can reduce psychological stress and the risk of investing right before a downturn.

How much do investment fees really cost me?

More than most people expect. On a $10,000 start with $500/month over 20 years, a 1% annual fee instead of 0.05% costs over $30,000 — see the fee table above. Always check a fund's expense ratio before investing.

Does this account for inflation?

No — results are nominal. For a rough real-terms figure, subtract your expected inflation rate from the return rate before entering it. A 7% return with 3% inflation is approximately a 4% real return.