How the investment Calculator works
The calculator compounds your balance monthly at one twelfth of your annual return and adds your contribution at the end of each month. That mirrors how most people actually invest, a fixed transfer every payday into a fund.
Each month: Balance = Balance × (1 + r/12) + monthly contribution
Example: $10,000 plus $400 a month at an 8% return becomes roughly $454,000 in 25 years. Only $130,000 of it is money you deposited, the rest is growth on growth.
Frequently asked questions
What annual return is realistic?
The S&P 500 has returned about 10% annually before inflation over the last century, and about 6% to 7% after inflation. Diversified portfolios with bonds land lower, so 5% to 8% is a common planning range.
Why do the last years grow so much faster?
Compounding is exponential. Growth is earned on all previous growth, so a portfolio's final third of the timeline often produces more than half of the ending value.
Should I invest a lump sum or monthly?
Historically a lump sum invested immediately beats spreading it out about two thirds of the time, but monthly investing matches how income arrives and smooths out bad timing.