Investment Calculator
Compound growth projections with real-world market benchmarks and an interactive chart.
Rates shown are historical averages for reference only. Past performance does not guarantee future results. This tool is for educational purposes, not financial advice.
About this calculator
This tool projects how an investment could grow over time using compound interest, based on historical average annual returns for major market benchmarks. Enter your initial investment, ongoing monthly contributions, and time horizon, then choose a market benchmark or enter a custom rate.
The chart shows your portfolio value versus the amount you actually invested, making it easy to see how much of the final value comes from market returns versus your own contributions.
Market benchmarks explained
- S&P 500 — 500 largest US companies. Historical nominal average: ~10%/yr. Most common benchmark for long-term US equity investing.
- NASDAQ-100 — Top 100 non-financial NASDAQ stocks, heavily tech-weighted. Historical average ~13.5%/yr with higher volatility.
- MSCI World ETF — ~1,500 companies across 23 developed countries. More globally diversified. ~8%/yr historical average.
- US Total Market — Entire US stock market including small and mid caps. ~10.5%/yr historical average.
- Emerging Markets — Companies in developing economies (China, India, Brazil, etc.). Higher potential return and risk. ~7%/yr long-term average.
- Moderate 60/40 Mix — 60% stocks, 40% bonds. Classic balanced portfolio. ~7%/yr historical average with lower volatility.
- Conservative (Bonds) — US bond index. Lower risk and return. ~4.5%/yr historical average.
How compound interest works
Compound interest means your returns generate their own returns over time. A $10,000 investment at 10%/yr becomes $11,000 after one year — but in year two, you earn 10% on $11,000 (not just the original $10,000). Over decades, this compounding effect becomes the dominant driver of portfolio growth.
Adding regular monthly contributions accelerates this dramatically. Even modest monthly amounts, started early, can outperform large lump-sum investments started late.
Common uses
- Estimating retirement savings from a regular investment plan
- Comparing different market allocations over the same time horizon
- Understanding the impact of fees on long-term returns
- Seeing how starting earlier vs later affects the final result
- Teaching the concept of compound growth visually
FAQ
- Are the returns guaranteed?
- No. Historical averages are informational only. Markets can have significant short-term losses. Long-term historical averages are reasonable planning assumptions but not promises.
- What is the expense ratio?
- A fee charged by ETFs and mutual funds as a percentage of assets per year. A 0.07% expense ratio on $100,000 costs $70/yr. This is deducted from the net return. Major index ETFs (VOO, VTI, etc.) typically range from 0.03–0.20%.
- What does inflation adjustment mean?
- Inflation erodes purchasing power over time. The inflation-adjusted value shows what your final portfolio would be worth in today's dollars at a 3% inflation rate. A portfolio worth $1M in 30 years might only have the purchasing power of ~$412K today.
- Are dividends included in the return rates?
- The historical return rates shown include dividend reinvestment (total return), not just price appreciation. This is the standard way to measure long-term market performance.
- Is this financial advice?
- No. This is a planning and educational tool. For actual investment decisions, consult a licensed financial advisor who can account for your specific situation, tax status, and risk tolerance.