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Investment Calculator

Plan your financial future with precision. Our Investment Calculator allows you to visualize the power of compound interest over time. By adjusting your initial investment, monthly contributions, and expected rate of return, you can see exactly how your portfolio can grow. Whether you are saving for retirement, a down payment on a home, or simply building wealth, this tool provides the clarity you need to make informed decisions.

Parameters
$
$
Future Value
$0
Total Invested
$0
Total Interest
$0
Growth Projection

Understanding Your Investment

To get the most out of this calculator, it helps to understand the specific terms used in the financial world. Below is a breakdown of the key parameters that determine your portfolio's growth over time.

Initial Investment

This is the starting amount of money you are putting into your investment account today. It acts as the seed from which your wealth grows. Even a small initial deposit can grow significantly over a long period due to compound interest.

Monthly Contributions

This represents the amount of money you plan to add to your investment on a regular basis (every month). Consistency is often more important than the initial amount; regular contributions help smooth out market volatility and accelerate growth.

Compound Interest

Albert Einstein famously called compound interest the "eighth wonder of the world." It is the process where the interest you earn on your investment is reinvested, earning you interest on your interest.

Annual Interest Rate

This is the percentage return you expect to earn on your investment each year. Historically, the stock market (S&P 500) has returned an average of about 10% annually before inflation, though conservative investments like bonds typically offer lower returns with less risk.

Frequently Asked Questions

How accurate is this investment calculator?

The calculator uses the standard compound interest formula to provide a mathematical projection. However, real-world investments fluctuate. The "Annual Interest Rate" assumes a constant return, which is rarely the case in reality. This tool serves as a planning estimate rather than a guaranteed prediction.

What is the difference between "Total Invested" and "Future Value"?

Total Invested is simply the sum of your initial deposit plus all your monthly contributions. It is the money that came out of your pocket. Future Value is the Total Invested plus all the interest (or growth) earned over time. The difference between these two numbers is your profit.

Should I invest a lump sum or monthly contributions?

Both strategies have merits. A lump sum takes advantage of "time in the market" immediately, while monthly contributions take advantage of "dollar-cost averaging," buying more shares when prices are low and fewer when prices are high. The best strategy is usually the one you can stick to consistently.

How often should I update my projections?

It is good practice to review your investment goals at least once a year. Market conditions change, and your personal financial situation (salary, expenses) may also evolve. Updating this calculator annually helps ensure you stay on track for your retirement or savings goals.