Investment Calculator
Lump sum, optional yearly additions, and a return assumption — future value, total ROI, and what growth contributed.
Project an investment
Future value, ROI, and why both matter
This calculator answers the investor's two favorite questions. Future value compounds your lump sum and yearly additions forward. ROI — total gain divided by total invested — tells you what percentage your money earned overall. A third lens, CAGR (compound annual growth rate), is just the constant yearly rate that produces the same result; it's the honest way to compare investments over different time spans.
A worked example
$25,000 invested, $6,000 added yearly, 8% for 15 years: future value about $242,200 on $115,000 invested — a gain of about $127,200, or a 110% total return. The lump sum portion alone grows to $79,300; the steady additions build the rest. The lesson hiding in the math: consistency beats timing. Missing the "perfect" entry point matters far less than the years of contributions that follow.
Reading return assumptions honestly
Long-run US stock averages sit near 9–10% nominal before inflation, but real portfolios hold bonds, pay fees, and live through crashes — which is why 6–8% is the common planning band. Fees deserve special hatred: a 1% annual fee on this example quietly removes about $25,000 of the final balance. Low-cost index funds exist precisely to keep that money compounding for you instead.
Frequently asked questions
What's the difference between ROI and CAGR?
ROI is total: a 110% ROI over 15 years. CAGR annualizes it: the same outcome equals about 5.1% per year on the blended contributions. Use CAGR to compare investments of different lengths.
Should I invest a lump sum at once or spread it out?
Historically, lump-sum investing wins about two-thirds of the time because markets rise more often than fall. Spreading it (dollar-cost averaging) trades some expected return for reduced regret if markets drop right after. Both are reasonable.
Does this account for taxes?
No. In tax-advantaged accounts (401(k), IRA, Roth), growth compounds untaxed. In taxable accounts, dividends and realized gains create annual drag — another argument for index funds, which trade rarely.
What return should I use for real estate or other assets?
Use the asset's realistic total return net of costs. For rentals, that's appreciation plus net rental yield minus expenses — often competitive with stocks but with leverage and labor attached.