Project the future value of any investment with a custom return rate, time horizon, and optional monthly contributions. Uses the same compound growth formula as professional financial models.
When you invest, your returns do not just grow your balance — they generate their own returns the following year. This is compound growth. In year one, $10,000 at 10% earns $1,000. In year two, you earn 10% on $11,000 — not $10,000. In year ten, you earn 10% on over $23,000. The same rate applied to a growing base produces accelerating dollar gains every single year without any additional investment.
Monthly contributions amplify this effect dramatically. Every new dollar you add immediately begins compounding. A $500 monthly contribution at 10% for 30 years produces over $1.1 million — but only $180,000 of that comes from your actual contributions. The rest is compound growth on growth. This is why financial advisors consistently say the most important variable is not how much you invest at once, but how consistently and how early you invest.
The right return rate to use depends on your investment vehicle. The S&P 500 has averaged approximately 10.7% nominally and 7 to 8% after inflation over long periods. A diversified index fund portfolio is reasonably modeled at 7 to 10%. Bonds average 3 to 5%. Cash in a high-yield savings account currently earns 4 to 5%. Always use the rate that matches the actual asset — overstating your return assumption is the most common planning mistake.
This is the standard Time Value of Money (TVM) formula used in professional financial modeling. The key insight: returns compound on themselves each period — so a 10% annual return on $10,000 in year one adds $1,000, but in year ten it adds over $2,300 on the same original investment.
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