Investment Return Calculator

This tool runs a simple loop: it takes your starting balance, adds your contribution for the period, then applies your expected rate of return to the combined total — and it repeats that once for every year (or month) in your time horizon. There's no hidden model behind it. The entire projection above is built from one formula applied over and over, so if you understand that one line of math, you understand everything the calculator is showing you.

A Worked Example, Step by Step

Say you start with $10,000, add $5,000 a year, and expect a 7% annual return over three years. Annual mode runs this formula once per year:

New Balance = (Previous Balance + Contribution) × (1 + Rate)

• Year 1: (10,000 + 5,000) × 1.07 = $16,050.00
• Year 2: (16,050 + 5,000) × 1.07 = $22,528.50
• Year 3: (22,528.50 + 5,000) × 1.07 = $29,455.50

That's exactly what happens when you click Calculate above. Switch to Monthly mode and the same formula runs 12 times a year — the rate becomes annualReturn / 100 / 12 and the contribution becomes annualContribution / 12 for each pass through the loop.

This Calculator vs. a DRIP Calculator vs. a Compound Interest Calculator

This tool treats every contribution as outside cash you're adding — it doesn't care whether that money came from your paycheck or a windfall. If you're specifically tracking a dividend-paying stock where the dividends themselves buy more shares rather than sitting as cash, the Dividend Reinvestment Calculator is the better fit, since it tracks share count and yield separately from price appreciation. And if you're not adding any new money at all — just letting a lump sum compound on its own — the Compound Interest Calculator strips the contribution variable out entirely, which makes it a cleaner way to isolate pure compounding.

Frequently Asked Questions

Q: In monthly mode, why isn't the result exactly the same as annual mode with the numbers divided by 12?

Because compounding happens 12 times a year instead of once, monthly mode very slightly out-earns annual mode at the same nominal rate — interest starts compounding on smaller additions sooner. Over a 30-year run at 7%, this typically adds a modest amount to the final balance versus annual mode.

Q: Does the contribution get added before or after that period's interest?

Before. Each period, the calculator adds your contribution to the balance first, then applies the growth rate to the combined total — check the formula above. That means your contribution earns a full period of return in the same period it's made.

Q: What happens if I set the annual return to 0%?

The projection becomes a pure sum of your initial investment and contributions, with no growth added at all. It's a quick way to see your floor number before any market risk enters the picture.

Q: Can I model a negative return, like a market downturn?

Not directly — the current version requires a return rate of zero or higher, and a negative number will trigger the validation alert. To approximate a downturn, run the calculator twice: once for the down year at your current balance, then feed that ending balance in as the Initial Investment for a second run covering the remaining years.