Investment Calculator – Find Out How Much Interest You Can Earn Over Time
Setting aside money to invest for a more secure financial future is a smart financial strategy. This investment calculator is designed to help you estimate potential outcomes and guide your planning process. When using the calculator, consider important factors such as your initial investment amount, annual contributions, the length of time you plan to invest, and how inflation, taxes, and rates of return may influence your results.
Several key factors—such as inflation, taxes, your contribution frequency, and the annual rate of return—can significantly impact the growth of your investments.
Use the investment calculator on this page to get a clearer picture of how much you could realistically accumulate over a selected period.
For assistance in filling out the fields or better understanding the output, refer to the definitions and explanations above.
Investment Returns Definitions
Use the following definitions and explanations to help you navigate the investment calculator and begin creating a savings and investment plan tailored to your goals.
Years
This field refers to the number of years you plan to invest and save. For example, if you are 40 years old and plan to invest until age 65, you would enter “25” years. You can choose any time frame that fits your personal financial planning—whether it is 10, 25, or even 40 years.
Rate of Return
This is the average annual compounded rate of return you expect on your investments.
Compounding means that your returns are reinvested, and future gains are calculated on the new total. For instance, if you invest $50,000 at a 10% annual return, you would have $55,000 after one year and $60,500 after the second year.
While exact returns cannot be predicted, reasonable assumptions typically fall between 5–10% annually for a portfolio including stocks. If you prefer lower-risk investments outside of the stock market, consider estimating a lower rate of return.
Initial Investment
This is the starting amount you plan to invest. It could be savings you already have or an inheritance you wish to invest.
If you are starting fresh, you can enter $0.
Additional Investments
Enter the amount you plan to contribute on a regular basis to your investment plan. This might be annual contributions to accounts like a Roth IRA, 401(k), or other investment vehicles.
Be mindful of contribution limits when planning your strategy.
Frequency of Contributions
Select how often you plan to contribute—options include weekly, bi-weekly, monthly, quarterly, or annually. Adjusting the frequency can impact your returns over time due to the effects of compounding.
Inflation Rate
The inflation rate affects the future purchasing power of your money.
Historically, U.S. inflation has averaged around 2.9% per year from 1925 to 2021. Choosing an inflation estimate between 2–4% is generally reasonable for long-term projections.
Tax Rate
This field reflects the percentage of your investment earnings you expect to pay annually in taxes.
Tax treatment varies depending on the type of account (e.g., IRAs and 401(k)s often defer taxes until withdrawal). For non-retirement accounts, you may owe annual taxes on interest, dividends, and capital gains.
Consulting a tax professional may help you plan more accurately.
Inflation Adjustment
Checking this option will adjust your future contributions for inflation. This helps you maintain the same purchasing power over time.
Note: If you are contributing the maximum allowable amount to a retirement account, you may not need to check this box.
Show Values After Inflation
Selecting this box will show your investment totals in today’s dollars, reflecting the impact of inflation.
This view helps you better assess the future purchasing power of your investments.
Compound Interest
Compound interest refers to earning interest on both your original investment and on accumulated interest. This leads to accelerated growth over time compared to simple interest.
Compounded Interest Return
This is the total amount of interest generated from reinvested earnings over the life of your investment plan. It grows larger with time and with more frequent contributions.
Simple Interest Return
Simple interest is calculated only on the principal and additional contributions without factoring in reinvested earnings.
Understanding the difference between simple and compound interest can help clarify how your savings will grow.
Total Invested Capital
This is the total amount you have personally contributed over the investment period. It excludes any returns or earnings from your investments.
For example, if you contribute $5,000 annually for 20 years, your total invested capital would be $100,000.
Investment Final Total
This is the total amount your investment will grow to after the chosen number of years, including your initial investment, your contributions, and all interest earned.
It represents the projected result of your investment plan based on the inputs you provide.
What Investing Does
Understanding how investing works involves recognizing the factors that influence risk, returns, and long-term growth. While the investment calculator provides a helpful projection, real-world investing includes variables that can shift year to year.
Risk and Returns
Investment returns are rarely consistent. One year you might gain 2%, the next 8%, followed by a decline of -4.5%, and then a surge of 20%. There is always a degree of risk involved—and generally, the greater the risk, the greater the potential reward.
Conservative investments typically offer lower returns but protect against significant losses, while high-risk investments can deliver bigger gains—or sharp declines.Smart investing is about balancing these risks and returns. Financial advisors often recommend a diversified asset allocation—blending higher-risk and lower-risk investments to stabilize your portfolio over time. This balance becomes even more important as you approach retirement and need to protect your accumulated wealth.
Starting Balance
Having a starting balance can significantly impact your future investment growth. Even a modest initial investment provides a foundation for compounding returns.
Using the investment calculator, you can explore different starting balances and see how they influence your final total. Seeding your account with a starting balance gives you a valuable head start toward achieving your goals.
Contributions
Regular contributions are essential for long-term success. Even small, consistent contributions—such as $100 a month—can make a major difference compared to relying solely on an initial investment.
By adding to your investment over time, you enhance the benefits of compounding returns. The calculator can show you the substantial impact that consistent investing habits can have over the years.
Rate of Return
As noted earlier, rates of return will fluctuate. When building a long-term investment strategy, it’s important to plan for occasional downturns while focusing on overall growth.
Maintaining a smart asset allocation—avoiding overexposure to risky investments—can help protect your portfolio. The early 2000s market crash serves as a reminder: companies like AOL and Enron collapsed and never recovered. Investors who were heavily invested in only a few high-risk companies often faced unrecoverable losses.
Diversification remains key to weathering market volatility.
Years to Accumulate
In investing, time is often your greatest advantage.
The more years you have to grow your investments, the more you can overcome temporary setbacks and benefit from long-term growth.
Someone starting at 25 years old has a very different outlook compared to someone starting at 55.
The investment calculator can help you model your situation, but remember—the sooner you begin, the greater your potential for meaningful results.
Note:
All investment projections are estimates based on historical trends and assumptions. Actual returns and outcomes will vary depending on market performance and individual circumstances.
