Finance Suite
Investment Calculator
Calculate returns on investments with regular contributions over time. Visualize the power of compound growth with adjustable rates and timelines.
Investment Calculator
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Future Value
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after 20 years
Contributions (100%)Earnings (0%)
Contributions
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Earnings
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Analytical Logic
The Power of Compound Growth
Compound interest is often called the "eighth wonder of the world." When your investment earnings generate their own earnings, growth accelerates exponentially over time.
The Compound Interest Formula
FV = PV × (1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) – 1] / (r/n)
- FV Future Value
- PV Present Value (initial investment)
- PMT Periodic contribution
- r Annual interest rate
- n Compounds per year
- t Years
FAQ
The S&P 500 has historically returned about 10% annually before inflation (7% after inflation). Bond returns average 4–6%. A diversified portfolio might expect 6–8% real returns over 20+ year horizons.
More frequent compounding (monthly vs. annually) yields slightly higher returns because interest earns interest sooner. The difference is modest - monthly compounding at 8% yields about 0.3% more than annual.
The Rule of 72 is a quick way to estimate how long an investment takes to double. Divide 72 by the annual return rate: at 8% growth, money doubles in approximately 9 years (72 ÷ 8 = 9).
Historically, lump-sum investing outperforms dollar-cost averaging about two-thirds of the time because markets tend to go up over time. However, DCA reduces the risk of investing at a peak.
This calculator shows pre-tax returns. In taxable accounts, capital gains taxes (15–20%) reduce net returns. Tax-advantaged accounts (401k, IRA, Roth IRA) can defer or eliminate taxes on gains.