How This Investment Calculator Works
The calculator compounds your initial investment and monthly contributions at a fixed annual return. It uses monthly compounding: each month your balance grows by the monthly rate, and your new contribution is added. Over long periods, compound growth dominates — a $500 monthly contribution at 8% for 20 years turns $130,000 invested into about $295,000.
Related Calculators
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Frequently Asked Questions
What return should I assume?
For a diversified stock portfolio, 7-10% annually is a common long-term assumption. Bond-heavy portfolios typically return 4-6%.
How often should I invest?
Monthly contributions through automatic transfers are the most consistent approach. Dollar-cost averaging reduces timing risk.
Does this calculator account for taxes?
No — the output is pre-tax. Capital gains taxes will reduce your actual returns depending on your country and holding period.
How much should I invest per month?
A common guideline is to invest 15-20% of your income. Start with what you can afford and increase by 1% each year.