Investment Calculator
Plan growth with compounding and contributions
This Investment Calculator projects how your balance can grow when you combine a lump sum with consistent monthly contributions. You can model compounding frequency (annually, quarterly, monthly, or daily) and choose whether contributions happen at the end of each month (typical payroll investing) or at the beginning of each month (money invested sooner).
If you’re comparing returns to borrowing costs or loan schedules, you may also find the APR Calculator and Amortization Calculator helpful.
Investment Calculator Tool
Results
Your results are calculated locally in your browser and displayed with rounded, readable formatting. Use the copy buttons to share results cleanly.
Formula + Substitution
We convert your selected compounding frequency into an effective monthly growth rate to match monthly contributions, then apply the standard future value logic.
How it works
Your inputs describe a standard investing scenario: an initial deposit P, recurring monthly contributions PMT, a nominal annual return r, and a time horizon t in years. Compounding frequency matters because it changes the effective annual yield. The calculator uses your compounding choice (n periods/year) to compute an effective monthly rate so monthly deposits can be projected consistently.
Core definitions
- P = initial investment (principal)
- PMT = monthly contribution
- r = nominal annual return (decimal, e.g., 0.07 for 7%)
- n = compounding periods per year (1, 4, 12, or 365)
- t = years invested
- N = total months = 12 × t
Monthly rate conversion
First, the calculator converts the nominal rate and compounding schedule into an effective monthly growth rate:
Future value with monthly contributions
With monthly rate i and total months N, the future value is:
Want to compare investing growth to a guaranteed deposit rate? Try the CD rate calculator for a simpler interest model.
Inflation adjustment (optional)
If you enable inflation, the calculator keeps the nominal projection and then discounts the ending balance into today’s dollars:
This is a practical “purchasing power” estimate. It does not change the investment’s nominal return; it answers a different question: “What might this amount feel like in today’s money?”
Use cases
- Estimate how a lump sum plus monthly deposits could grow for a retirement goal.
- Compare “invest monthly” vs “invest at the start of the month” to see timing impact.
- Stress-test expectations by running optimistic and conservative return scenarios.
- Measure how compounding frequency changes the effective annual yield and ending balance.
- Translate a nominal future value into inflation-adjusted purchasing power.
- Set a target: adjust monthly contributions until the ending balance matches your goal.
Worked examples
Example 1: Lump sum + monthly investing (monthly compounding)
Inputs: P=$10,000, PMT=$250, t=20 years, r=7%, compound=monthly, timing=end of month.
- Compute monthly rate: i = (1 + 0.07/12)^(12/12) − 1 ≈ 0.005833…
- Total months: N = 20×12 = 240.
- Compute FV using the annuity factor: FV = P(1+i)^N + PMT×((1+i)^N − 1)/i.
Interpretation: long horizons magnify compounding, and monthly deposits add meaningful leverage over time.
Example 2: Same plan, but contributions at the beginning of each month
Inputs: Same as Example 1, except timing=beginning of month.
- Monthly rate and N remain the same.
- Beginning-of-month deposits get one extra month of growth each period, so multiply the contribution term by (1+i).
- FV becomes: P(1+i)^N + PMT×((1+i)^N − 1)/i×(1+i).
Interpretation: investing earlier typically yields a higher ending balance because each deposit compounds longer.
Example 3: Inflation-adjusted purchasing power
Inputs: P=$5,000, PMT=$150, t=15 years, r=6%, compound=quarterly, timing=end of month, inflation=2.5%.
- Compute monthly rate from quarterly compounding: i = (1 + 0.06/4)^(4/12) − 1.
- Compute nominal FV using the same FV formula with monthly contributions.
- Discount to today’s dollars: FV_real ≈ FV / (1.025)^15.
Interpretation: nominal growth can be substantial, but inflation-adjustment helps compare future money to today’s costs.
Common mistakes to avoid
- Assuming a single “average return” is guaranteed—markets vary year to year.
- Forgetting contribution timing: beginning-of-month deposits usually grow more than end-of-month deposits.
- Mixing nominal and real values (inflation-adjusted): compare like with like when planning goals.
- Using unrealistic rates (very high or very negative) without considering risk and volatility.
- Ignoring time horizon—small differences in years can materially change compounding outcomes.
- Overlooking fees/taxes: this calculator is a planning estimate, not a net-after-fee projection.
Quick tips for better projections
- Run two scenarios (conservative and optimistic) and plan around the conservative case.
- Try “beginning of month” timing if you invest right after payday.
- Use a realistic inflation rate to translate future balances into purchasing power.
- Increase contributions over time in real life—then re-run the calculator occasionally to stay on track.
- Focus on the split between contributions and growth: it highlights the value of time in the market.
- If the monthly rate is near zero (very low returns), contributions will dominate the final balance.
Accuracy & Method
- Local calculation: results are computed in your browser (no server processing).
- Rounding policy: currency is displayed to 2 decimals; percentages to 2 decimals; large numbers use separators and never show scientific notation.
- Privacy-first: inputs stay on your device and are not transmitted.
- Last Updated: —
Sources & References
Compound interest (periodic compounding); future value of a lump sum; future value of an annuity (ordinary annuity and annuity due); effective annual rate (EAR); inflation discounting for purchasing power.
FAQ
What does this Investment Calculator actually estimate?
It estimates your projected ending balance (future value) based on an initial investment, monthly contributions, an expected annual return, and a compounding frequency. The results also show how much of your ending balance came from your deposits versus investment growth. Because this is a planning tool, it assumes a steady return and steady contributions. Real portfolios often fluctuate, and fees or taxes can reduce returns. Use the calculator to compare scenarios, understand compounding impact, and set realistic contribution targets.
Why does compounding frequency change the result if the annual return is the same?
Compounding frequency changes the effective annual rate (EAR). A nominal 7% return compounded monthly produces a slightly higher effective yield than 7% compounded annually because growth is credited more often. This calculator converts your chosen compounding schedule into an effective monthly growth rate so monthly deposits and monthly growth are modeled consistently. The difference is usually modest year-to-year, but over long time horizons it can create a noticeable gap in ending balance, especially with larger contributions.
What’s the difference between end-of-month and beginning-of-month contributions?
End-of-month contributions (ordinary annuity) assume you deposit after the month’s growth is applied, so each deposit earns growth starting the next month. Beginning-of-month contributions (annuity due) assume you deposit before growth is applied, so each deposit gets one extra month of compounding. Over short periods the difference may be small, but over many years it can be meaningful. If you invest right after payday (early in the month), beginning-of-month timing may better reflect your real behavior.
Can I use a negative expected return?
Yes, within reasonable bounds. A negative expected return can model conservative stress tests or periods of loss, and the calculator will still compute an ending balance without showing invalid numbers. If returns are negative enough, growth can be negative and the ending balance may be less than total contributions. That’s not a prediction—it’s a scenario you can use to explore risk. For planning, many people run multiple cases (for example, -2%, 4%, and 8%) and compare the range of outcomes.
How is “Total Contributions” calculated?
Total Contributions equals your initial investment plus the sum of all monthly contributions over the selected time horizon. If you invest for 20 years, the calculator counts 20×12 monthly deposits. This total is not “principal only” in an accounting sense; it’s a simple tracking total of money you put in. Total Growth (earnings) is then computed as Ending Balance minus Total Contributions. This split helps you see how much of your outcome is driven by saving behavior versus compounding over time.
What does the inflation-adjusted future value mean?
The inflation-adjusted future value is a purchasing power estimate in today’s dollars. The calculator first computes a nominal ending balance using your return and compounding assumptions. Then it discounts that nominal balance by your inflation rate over the number of years invested. This doesn’t change the investment’s nominal return; it changes the unit you’re measuring in. Inflation adjustment is useful when comparing future balances to goals priced in today’s money, like current living expenses or the present cost of a home.
Why does the calculator convert everything to a monthly rate?
Because contributions are monthly, the cleanest way to model growth consistently is to express compounding as an effective monthly growth rate. Even if you choose annual or daily compounding, the calculator translates that schedule into a monthly equivalent rate based on the nominal annual return and the selected compounding frequency. That way, monthly deposits line up with monthly growth steps. This approach keeps the math stable and avoids heavy day-by-day simulations, while still reflecting the relative impact of compounding frequency on effective yield.
How should I interpret the “growth multiple” shown in the results?
The growth multiple compares your projected ending balance to the total amount you contributed. A multiple of 1.00 means your ending balance equals your total contributions (no net growth). A multiple of 1.50 means your ending balance is 50% higher than what you put in, and so on. This metric is helpful for goal-setting because it summarizes efficiency: how much the plan turns deposits into a larger balance. If you want to improve the multiple, the most common levers are time, contribution timing, and return assumptions.