Investment Return Calculator (Compounding)
The Investment Return Calculator shows how your investments will grow over time thanks to compound interest vs if you didn't invest. This will help you determine how much to invest each month in order to achieve your financial goals.
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Investment Return Calculator Explained
The investment return you make increases over time thanks to the incredible power of compound interest.
If you invested $1000 and made a 20% return in year one, that gives you $200 profit and a total portfolio value of $1200.
If you make the same 20% return the next year, your profit will not be $200, but instead it will be $240:
And if you invested another $1000 that year, it would be $440 in profit, leading to a total portfolio value of $2640:
If you instead simply saved $1000 each year without investing, you would have just $2000, or $640 less, and this difference increases exponentially over time, which becomes very clear in the chart.
If you invested $1000 and made a 20% return in year one, that gives you $200 profit and a total portfolio value of $1200.
If you make the same 20% return the next year, your profit will not be $200, but instead it will be $240:
1200 * 0.20 = $240And if you invested another $1000 that year, it would be $440 in profit, leading to a total portfolio value of $2640:
1000 + 200 + 1000 + 440 = $2640If you instead simply saved $1000 each year without investing, you would have just $2000, or $640 less, and this difference increases exponentially over time, which becomes very clear in the chart.