Investment Calculator
Project your investment growth over time with inflation adjustment. Compare nominal and real returns to understand your true purchasing power.
Investment Details
Enter your investment details and click "Calculate" to project your growth.
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Pro Tip
The real rate of return (after inflation) is what matters for planning your financial future. Always consider inflation when setting long-term financial goals.
Try the Inflation Calculator →Understanding Investment Growth
Investing is the process of putting money to work with the expectation that it will grow over time. The key principle behind long-term investing is compound growth, where your returns generate their own returns, creating an exponential growth curve.
The nominal return is the raw percentage your investment earns before accounting for inflation. The real return (inflation-adjusted) shows the actual increase in purchasing power. A 10% nominal return with 3% inflation gives roughly a 6.8% real return.
Dollar-cost averaging through regular monthly contributions reduces the impact of market volatility. By investing consistently, you buy more shares when prices are low and fewer when prices are high, potentially lowering your average cost per share.
Historical data shows that diversified stock portfolios have returned approximately 7-10% annually over long periods, though past performance does not guarantee future results. Time in the market generally outperforms attempts to time the market.
Investment Growth Formula
Where:
FV = Future value of the investment
P = Initial investment (present value)
r = Annual return rate (decimal)
t = Investment period in years
PMT = Monthly contribution
Example
$25,000 initial with $500/month at 8% for 20 years:
- • Initial investment grows to: ~$116,524
- • Monthly contributions grow to: ~$294,510
- • Total future value: ~$411,034 (nominal)
- • Total invested: $145,000
- • Inflation-adjusted value (at 3%): ~$227,415