Investment Calculator
Project how an initial investment plus regular contributions could grow over time.
How this calculator works
This models monthly-compounded growth on your starting balance plus every recurring contribution, giving a realistic projection of a typical brokerage or index-fund investment.
P = initial investment · r = annual return · t = years
Understanding investment risk
This calculator assumes a constant annual return for simplicity, but real markets fluctuate year to year. Treat the result as a long-term average projection, not a guarantee — higher expected returns generally come with higher volatility.
Understanding sequence of returns
This calculator assumes a constant annual return, but real markets rise and fall unevenly year to year. Two investors with the same average return can end up with very different balances depending on when the gains and losses occurred — a concept called sequence of returns risk.
This matters most near the point of withdrawal (like retirement), where a downturn early in that phase has an outsized negative impact compared to the same downturn occurring years later, since there's less time to recover before money is withdrawn.
A worked example
Investing $10,000 upfront plus $300/month at an 8% average annual return for 20 years grows to roughly $196,000. Of that, about $82,000 came from contributions and roughly $114,000 came from investment growth — more than half the final balance is growth, not deposits.
This illustrates why starting to invest early tends to matter more than the exact monthly amount — the growth portion compounds regardless of when contributions were made, so earlier dollars have simply had more time to work.
Diversification and risk
This calculator assumes a single constant return rate, but real investments carry risk that varies by asset type — stocks historically offer higher long-term returns than bonds, but with more year-to-year volatility. Diversifying across asset types is a common strategy to manage that volatility while still capturing long-term growth.
Tax treatment also affects real-world returns. Growth inside tax-advantaged accounts like a 401(k) or IRA isn't taxed annually the way a standard brokerage account often is, which can meaningfully improve actual after-tax growth compared to what a simple projection shows. Also worth checking: how much that growth is worth in today's dollars using our Inflation Calculator.
Frequently asked questions
Is 8% a realistic return assumption?
It's within the historical long-term range for diversified equity portfolios before inflation, but past performance doesn't guarantee future results.
How much difference do monthly contributions make?
A great deal over long periods — consistent contributions often account for more of the final balance than the initial investment itself, thanks to compounding.
Should I invest a lump sum or spread it out (dollar-cost averaging)?
Historically, investing a lump sum immediately outperforms spreading it out on average, since markets trend upward over time — but dollar-cost averaging can reduce regret risk and smooth out volatility for some investors.
What's a reasonable fee to pay on investments?
Low-cost index funds often charge well under 0.5% annually, while some actively managed funds charge 1% or more — fees compound over time just like returns, so lower costs meaningfully help long-term growth.
What is dollar-cost averaging?
Investing a fixed amount at regular intervals regardless of market price, which smooths out the effect of market timing and is the strategy this calculator's monthly contribution feature effectively models.
Should I use a tax-advantaged account for long-term investing?
Accounts like a 401(k), IRA, or Roth IRA offer tax benefits that can meaningfully improve long-term after-tax growth compared to a standard taxable brokerage account, making them worth prioritizing for retirement-focused investing.