Calculator Suite

Investment ROI Calculator

Calculate compound interest returns, future value, and investment growth projections

Investment Details
Enter your investment parameters to calculate future value and ROI

Your starting investment amount

Amount you'll invest each month

Expected yearly return on your investment

How long you'll invest for

How often returns are compounded

$6,000.00

Monthly contribution × 12 months = Total yearly investment

Expected annual inflation rate for real value calculations

When you'll start investing

Initial Investment Presets

$1,000$5,000$10,000$25,000$50,000$100,000

Monthly Contribution Presets

$0$100$250$500$1,000$2,500$5,000

Expected Return Rates

Conservative (4%)Moderate (7%)Aggressive (10%)S&P 500 Avg (11%)High Growth (15%)
Investment Logic & Formulas
The mathematics behind compound interest and ROI

Future Value (Compound Interest)

FV=P(1+rn)ntFV = P(1 + \frac{r}{n})^{nt}

PP = Initial principal balance

rr = Annual interest rate (decimal)

nn = Number of times interest applied per time period

tt = Number of time periods elapsed

ROI (Return on Investment)

ROI=Net IncomeCost of Investment×100%ROI = \frac{\text{Net Income}}{\text{Cost of Investment}} \times 100\%

Standard formula to measure profitability.

Real Rate of Return (Inflation Adjusted)

rreal=1+rnominal1+rinflation−1r_{real} = \frac{1 + r_{nominal}}{1 + r_{inflation}} - 1

The Fisher Equation helps determine purchasing power.

Investment ROI: A Comprehensive Guide

TL;DR: This ROI calculator determines the future value of your investments by accounting for initial contributions, monthly additions, compound interest, and inflation. It is essential for planning retirement, evaluating business projects, or tracking portfolio growth.

Real-World Example: The Power of Compounding

Consider a typical long-term investment scenario:

  • Initial Investment: $10,000
  • Monthly Contribution: $500
  • Annual Return: 7% (Historical market average)
  • Time Horizon: 20 Years

The Results:

  • Total Invested: $130,000 (Your money)
  • Total Interest Earned: $163,918 (Free money!)
  • Total Future Value: $293,918

💡 The Compounding Effect

Notice that the interest generated ($163k) is actually more than what you contributed ($130k). This is exponential growth in action—money making more money.

3 Key Checks Using This Calculator

Use this tool to evaluate the health of your investment plan:

  1. Inflation-Adjusted Growth: Toggle the "Inflation Adjustment" to see your "Real Return." A nominal $1 million in 30 years might only buy $400k worth of goods today.
  2. Contribution vs. Return Ratio: In the early years, your growth comes from contributions. In later years, it should come from returns. Check the chart to see when the "Interest" bar overtakes the "Principal" bar.
  3. Time Sensitivity: Reduce the "Time Horizon" by 5 years and see how drastically the Total Value drops. This quantifies the cost of waiting to invest.

Assumptions & Limitations

Investment projections are estimates, not guarantees. Keep these factors in mind:

Model Assumptions:
  • Returns are compounded annually (unless changed)
  • Contributions are made at the end of each period
  • Rate of return remains constant (linear growth)
real-World Variables NOT Included:
  • Capital gains taxes or dividend taxes
  • Management fees or expense ratios
  • Market volatility (sequence of returns risk)

Intro to Compound Interest

Source: Khan Academy

Investment ROI Examples

Source: The Organic Chemistry Tutor

Frequently Asked Questions

What is a good ROI percentage?

A "good" ROI depends on your risk tolerance and the asset class. Historically, the stock market (S&P 500) has returned about 10% annually before inflation. Real estate often aims for 8-12% (cash on cash), while safer high-yield savings accounts might offer 3-5%.

How does inflation affect my ROI?

Inflation reduces the purchasing power of your money. If your investment grows by 6% but inflation is 3%, your "real" return is only about 3%. It's crucial to aim for returns that outpace inflation to grow real wealth.

Simple vs. Compound Interest?

Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus the accumulated interest. Over long periods, compound interest (exponential growth) will vastly outperform simple interest (linear growth).

Should I invest a lump sum or monthly?

Statistically, lump-sum investing often outperforms because your money is working for longer (Time in Market). However, monthly investing (Dollar Cost Averaging) reduces the risk of buying at a market peak and is often psychologically easier for investors.