How to use the Investment Calculator
- Enter your current invested balance.
- Enter the amount you contribute each month.
- Set a realistic expected return — 6–7% is a common long-run real equity assumption after inflation.
- Set your horizon and note how the growth share of the balance changes with time.
How the calculation works
The projection combines two components: the lump sum compounding forward, and an ordinary annuity of monthly contributions. Both use the same monthly rate, so contributions made later have proportionally less time to compound — which is why the growth share accelerates in the final third of any horizon.
Nominal versus real matters. At 7% nominal with 3% inflation, a 30-year projection overstates purchasing power by roughly 2.4×. Enter a real return if you want the answer in today's money.
Real markets do not deliver a constant rate. Sequence of returns is largely irrelevant during accumulation with steady contributions, but becomes critical during withdrawal, which is why a separate drawdown analysis is worth doing before retirement.
FV = PV(1 + r)ⁿ + PMT × [((1 + r)ⁿ − 1) ÷ r], r = annual return / 12Source: Dimson, Marsh & Staunton, Credit Suisse Global Investment Returns Yearbook, for long-run real return benchmarks.
Worked example
$10,000 starting, $500 a month, 7% return, 20 years.
- The lump sum grows to about $40,400.
- The contribution stream grows to about $260,500.
- Total contributed is $130,000.
About $300,900 ending balance, of which roughly 57% is growth rather than contributions.
Frequently asked questions
What return should I assume?+
Use 6–7% nominal for a diversified equity-heavy portfolio and lower for balanced allocations. Do not extrapolate a recent bull market.
Are fees included?+
No. Subtract your all-in expense ratio from the return input, or use the mutual fund fee calculator to quantify it.
Monthly or annual contributions?+
Monthly, contributed at period end. Front-loading annually improves the result slightly.
Last reviewed September 1, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.