Investment Calculator
Estimate how your investments can grow over time with compound interest and regular contributions.
What Is an Investment Calculator?
An investment calculator helps you estimate the future value of your investments based on your initial amount, monthly contributions, annual interest rate, and time period. Whether you’re planning for retirement, education, or long-term savings, this tool allows you to understand how your money can grow over time.
How the Investment Calculator Works
This calculator uses the compound interest formula to project future investment value. By entering your initial investment, monthly contribution, annual interest rate, and investment duration, you can instantly see your potential returns. Compound interest means that your returns grow not only on the principal but also on accumulated interest.
Formula Used
The formula for compound interest with regular contributions is:
FV = P(1 + r/n)nt + PMT × [(1 + r/n)nt − 1] / (r/n)
Where:
– FV = Future Value
– P = Principal amount
– r = Annual interest rate
– n = Compounding periods per year
– t = Number of years
– PMT = Regular contribution
Example Calculation
If you invest $5,000 initially, contribute $200 monthly, with a 6% annual return for 10 years, your total investment would be $29,000. Your estimated return would grow to approximately $39,700, resulting in a profit of nearly $10,700 from interest alone.
Benefits of Using an Investment Calculator
- Understand the power of compound interest.
- Plan your long-term savings goals efficiently.
- Compare different rates and investment periods easily.
- Make informed financial decisions with real-time results.
Investment Tips
Start early and invest consistently. Even small contributions add up over time thanks to compound growth. Diversify your investments and review them annually to adjust based on your goals and market performance.
Additional Tools
You can also explore our Interest Calculator, Savings Calculator, and Loan Calculator to plan your complete financial strategy.
External Resources
For more on investing and compound growth, visit Investor.gov or learn from detailed articles at Investopedia.
Conclusion
An investment calculator is one of the simplest yet most powerful tools to visualize your financial future. It helps you take control of your money and plan smarter for your goals — whether saving for retirement, a new home, or your children’s education.