Investment Calculator
Calculate investment returns, compound annual growth rate (CAGR), and portfolio value.
An investment calculator - also useful as a future value calculator or investment growth calculator - projects the future value of a portfolio based on a starting amount, ongoing monthly contributions, an expected annual return, and a time horizon. It also calculates Compound Annual Growth Rate (CAGR), effectively working as a return on investment calculator when you know a starting and ending value, which is useful for evaluating how an existing investment has actually performed.
Enter your starting investment, planned monthly contribution, expected annual return, and number of years to project a future portfolio value - or enter a starting and ending value with a time period to calculate the CAGR of a past investment.
Worked Calculation Examples
| Scenario | Result | Calculation Step |
|---|---|---|
| $10,000 growing to $25,000 in 8 years | 12.14% CAGR | Compound Annual Growth Rate is 12.14%. |
Understanding CAGR vs. Average Annual Return
Compound Annual Growth Rate (CAGR) smooths out year-to-year volatility into a single, consistent annual growth rate that would produce the same ending value over the period - it's a cleaner way to compare investments than a simple average of yearly returns, which can be skewed by a few unusually good or bad years. A CAGR of 10% over 8 years means the investment grew as if it compounded at a steady 10% annually, even if the actual path was bumpier.
Why Consistent Contributions Matter More Than Timing
Trying to time when to invest a lump sum based on market conditions is notoriously difficult even for professional investors. A monthly contribution strategy - called dollar-cost averaging in the U.S. and a SIP (Systematic Investment Plan) in markets like India - spreads purchases across market ups and downs automatically, which removes the pressure of picking a 'perfect' entry point and tends to produce more consistent long-term results for most investors than attempting to time the market.
What's a Reasonable Return to Expect
The S&P 500, a common benchmark for U.S. stock market performance, has returned an average of roughly 10% annually before inflation over long historical periods, though any single year can vary from a large loss to a large gain. Using a single historical average as a guaranteed future return is a common planning mistake - a more conservative estimate (often 6-8% for a diversified portfolio) accounts for the uncertainty that any individual investment period may underperform the long-run historical average.
How to Use the Investment Calculator
- Open the Investment Calculator and enter the values requested in the input fields.
- Check the units, percentages, dates, or time periods before reading the answer.
- Review the instant result and adjust any value to compare another scenario.
- Use the formula, example, and FAQs below to understand how the investment calculator works.
Frequently Asked Questions
What is a good rate of return for an investment?
The S&P 500 has averaged roughly 10% annually before inflation over long historical periods, though many financial planners use a more conservative 6-8% assumption for future projections to account for year-to-year variability.
What is CAGR and how is it different from total return?
CAGR (Compound Annual Growth Rate) expresses growth as a smooth, consistent annual rate, while total return is simply the overall percentage gain over the entire period regardless of the path it took to get there.
Is it better to invest a lump sum or invest monthly?
Both can work, but consistent monthly investing (dollar-cost averaging) removes the difficulty of timing the market and tends to produce more predictable results for most individual investors than trying to time a single lump-sum entry point.
Does this calculator account for investment fees?
No. Fund expense ratios, advisory fees, and trading costs all reduce your real return and are not factored into this projection - a 1% annual fee, for example, can meaningfully reduce long-term growth over 20-30 years.
How does inflation affect my investment returns?
Inflation reduces the purchasing power of your future returns. A 7% nominal return with 3% inflation leaves roughly a 4% real (inflation-adjusted) increase in purchasing power - worth factoring in when setting long-term goals.
Can I use this calculator for retirement accounts like a 401(k) or IRA?
Yes, the growth math is the same. For a more retirement-specific projection that includes drawdown planning, see the dedicated Retirement Calculator.
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Last updated: September 29, 2026.