Investment Growth Calculator
Project the future value of an investment combining a lump-sum deposit with regular monthly contributions. Ideal for retirement planning, college savings, or any long-term savings goal.
About this calculator
This calculator uses compound interest applied to both an initial lump sum and ongoing monthly contributions. The future value of the lump sum is: FV₁ = initialInvestment × (1 + r)^n, where r is the annual return rate and n is the number of years. The future value of the monthly contributions uses the future value of an annuity: FV₂ = monthlyContribution × ((1 + r/12)^(n×12) − 1) / (r/12). The total projected value is FV₁ + FV₂. Because interest compounds on both the principal and each contribution over time, small monthly additions can dwarf the original deposit over long horizons — a phenomenon known as the power of compounding.
How to use
Suppose you invest $5,000 today, add $200 per month, expect a 7% annual return, and plan to invest for 20 years. Step 1 — Lump-sum growth: 5000 × (1 + 0.07)^20 = 5000 × 3.8697 ≈ $19,348. Step 2 — Contribution growth: 200 × ((1 + 0.07/12)^240 − 1) / (0.07/12) = 200 × 130.67 ≈ $26,134. Step 3 — Total: $19,348 + $26,134 ≈ $45,482. Adjust the inputs above to model your own scenario.
Frequently asked questions
How does monthly contribution amount affect long-term investment growth?
Monthly contributions have a compounding effect that accelerates dramatically over time. Each deposit earns returns not just for the remaining period but also on all previously accumulated interest. Increasing your monthly contribution by even $50 can add tens of thousands of dollars over a 20–30 year period. Running multiple scenarios in this calculator helps you find the monthly amount that realistically meets your savings target without overextending your budget.
What annual return rate should I use for investment growth projections?
A commonly used benchmark for a diversified stock index fund is 7–10% annually before inflation, and roughly 5–7% after adjusting for inflation. Conservative bond-heavy portfolios might average 3–5%. The right rate depends on your asset allocation, risk tolerance, and time horizon. Since these are projections rather than guarantees, it is wise to run calculations at both an optimistic rate and a more conservative one to understand the range of possible outcomes.
Why does the investment growth formula treat monthly contributions differently from the initial investment?
The initial investment sits in the account for the full investment period and earns compound interest continuously from day one, so it uses a straightforward exponential growth formula. Monthly contributions, however, each enter at different points in time — the first contribution compounds for almost the full period while the last earns interest for only one month. The future-value-of-annuity formula efficiently accounts for this staggered timing by summing all those individual compounding periods into a single equation.