# How will my investment grow?

Computes what a starting amount plus regular monthly or yearly contributions grows to at a fixed yearly return, and how much of it is growth.

- Page: https://www.acalculator.org/finance/investment-calculator
- JSON spec: https://www.acalculator.org/finance/investment-calculator.json
- Version: 18a0f954d4fd

## Default answer

Example with the default inputs (Starting amount $10,000.00, Contribution $500.00, How often do you add it? Monthly, Expected yearly return 7%, For how long? (years) 20, Contributions are added at the End of the period, Raise contributions each year by 0%, Prices rise each year by 3%): Putting in $130,000.00 over 20 years at 7% a year grows to $292,465.03, of which $162,465.03 is growth.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| start | Starting amount | The amount invested today. |
| add | Contribution | The amount added each month or each year, depending on how often you add it. |
| freq | How often do you add it? | Whether the contribution is added every month (12 times a year) or once a year. |
| rate | Expected yearly return | The yearly return, as the percent the balance grows in a year. It stays the same every year. |
| years | For how long? (years) | How many years the money is invested. |
| when | Contributions are added at the | Start or end of each period. A monthly contribution at the start of a month earns that month’s growth. |
| raise | Raise contributions each year by | The percent the contribution goes up at the start of each new year. |
| inflation | Prices rise each year by | The yearly inflation rate used to show the final balance in today’s money. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| fv | You’ll have | The balance at the end of the last month. |
| paidIn | Your money | The starting amount plus every contribution. |
| contributions | Contributions | Every contribution added, without the starting amount. |
| growth | Growth | The final balance minus your money. |
| real | In today’s money | The final balance divided by (1 + inflation) to the power of the years. |

## Method

Each month the balance grows at the monthly rate (1 + R)^(1/12) − 1, where R is the yearly return; contributions are added at the start or end of each month (monthly) or of each year (yearly).

## Assumptions

- The yearly return stays the same every year. Real returns go up and down, and can be negative.
- Growth compounds monthly at the rate that gives exactly the yearly return over 12 months.
- A raise applies from the start of year 2, and again each year after.
- No fees or taxes are taken out, unless you lower the return to allow for them.
- “In today’s money” divides the final balance by (1 + inflation)^years.
- This is an estimate for planning, not financial advice.

## Worked examples

1. start = $20,000.00, freq = 12, rate = 7%, years = 10, when = end, inflation = 3% gives fv = $39,343.03, growth = $19,343.03, real = $29,274.91. Source: hand calculation in content.mdx: 20,000 × 1.07^10 (SEC Investor.gov compound interest formula).
2. start = $0.00, add = $500.00, freq = 12, rate = 6%, years = 30, when = end gives fv = $487,256.49, paidIn = $180,000.00, growth = $307,256.49. Source: future value of an annuity, hand calculation in content.mdx.
3. start = $1,000.00, add = $6,000.00, freq = 1, rate = 5%, years = 3, when = start gives fv = $21,018.38, contributions = $18,000.00. Source: hand calculation in content.mdx: 1,000 × 1.05³ + 6,000 × (1.05³ + 1.05² + 1.05).
4. start = $0.00, add = $100.00, freq = 12, rate = 0%, years = 2, when = end, raise = 10% gives fv = $2,520.00, paidIn = $2,520.00, growth = $0.00. Source: hand calculation in content.mdx: 12 × 100 + 12 × 110.

## FAQ

### What yearly return should I enter?

Nobody knows future returns. Investments such as stock funds rise and fall from year to year, and some years they lose money. The calculator uses one fixed rate for every year, so treat the result as one possible path. Try a low, a middle, and a high rate to see a range, and compare the results.

### Why is a 7% yearly return not 7 ÷ 12 per month here?

The calculator uses the monthly rate that compounds to exactly the yearly return: (1 + 0.07)^(1/12) − 1 = 0.5654% a month. Twelve months at that rate give exactly 7%. Using 7 ÷ 12 = 0.5833% a month would give 7.23% a year instead.

### Does it matter if I add money at the start or the end of the month?

A little. Money added at the start of a period grows for that whole period, so the final balance is higher. With $500 a month at 6% for 30 years, adding at the start gives about $2,370 more than adding at the end. You can switch this under "Timing, raises and inflation".

### What does "in today’s money" mean?

Prices usually rise over time, so a dollar in 20 years buys less than a dollar today. "In today’s money" divides the final balance by (1 + inflation) for each year. At 3% inflation, $100,000 in 20 years buys about what $55,368 buys today.

### Are fees and taxes included?

No. The calculator adds growth at the rate you enter and takes nothing out. Fund fees and taxes lower what you keep. To allow for a fee, lower the return by it: a 7% return with a 0.5% yearly fee is roughly a 6.5% return.

### How is this different from the compound interest calculator?

The compound interest calculator is for savings with an interest rate and a compounding choice (monthly, quarterly, yearly). This investment calculator uses a yearly return, lets you add money once a year or every month, at the start or the end, and raise the amount each year.

### Is this financial advice?

No. It is a calculator that shows the arithmetic of steady growth. It cannot tell you what to invest in or what return you will get.

## Sources

- U.S. Securities and Exchange Commission, Investor.gov compound interest calculator and formula. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Future value of an annuity and equivalent periodic rates: S. A. Broverman, Mathematics of Investment and Credit, chapters 1 and 2.