Investment Growth Calculator

Worked example

Start with a $10,000 lump sum, add $500 a month, assume a 7% annual return, and let it run for 25 years. The tool compounds monthly: each month it adds your $500, then applies one twelfth of the annual return to the whole balance, so every contribution starts earning right away. Over 25 years your own money totals $160,000, which is the $10,000 lump plus $500 a month for 300 months. Compounding turns that into about $464,653. The difference, roughly $304,653, is investment growth, and it is nearly twice what you put in. Because money loses purchasing power over time, the tool also shows a real value. Discounting the ending balance by 3% inflation a year, the $464,653 is worth about $221,921 in today's dollars. That gap between the nominal and real figures is a reminder that a 7% headline return is partly eaten by inflation.

How it is calculated

The projection runs month by month for the full horizon. Each month it adds your regular contribution to the balance, then multiplies the new balance by one plus the monthly rate, where the monthly rate is your annual return divided by 12. Compounding monthly rather than once a year slightly raises the effective growth because returns begin earning on themselves sooner. Total contributed is the starting lump sum plus every monthly deposit, and growth is the ending balance minus that contributed amount. The real value line divides the nominal ending balance by one plus the inflation rate raised to the number of years, converting tomorrow's dollars into today's purchasing power. The model assumes a steady return every month, which real markets never deliver, so treat the figure as a smooth long-run estimate rather than a guarantee, and remember it ignores taxes and fees that would reduce the net result.