Investment Calculator: See How Your Money Can Grow

The goal of any investment is to get more cash out than you put in. The profit (or loss) you incur is your "return on investment." And thanks to compounding returns, the longer you leave your money invested, the higher your potential returns could be. Use our investment calculator to estimate how much your investment could grow over time.

Investment calculator

Enter your initial investment, any planned additional contribution, your overall time horizon and your expected return to estimate how much your investment might grow over time. For most investments, you'll want to opt for daily compounding.

How to use NerdWallet’s investment return calculator:

1. Enter an initial investment. If you have, say, $1,000 to invest right now, include that amount here. If you don’t have an initial amount to invest now, you can enter $0.

2. Enter your regular contributions. If you plan to invest a certain amount every month into your investment account (a strategy known as dollar-cost averaging), include this amount after selecting the “monthly” option. Or, if you’d rather invest one lump sum once per year, choose “annually” and include your planned annual contribution. If you do not plan to make regular contributions, select either option and enter $0.

3. Choose how long your investment will grow. How long do you plan to keep your money invested? If you’re investing in stocks, it’s generally a good idea to stay invested for at least five years to weather any volatility post-purchase.

4. Enter your expected rate of return. For a point of reference, the S&P 500 has a historical average annual total return of about 10%, not accounting for inflation. This doesn’t mean you can expect 10% growth every year; you could experience a gain one year and a loss the next. But if you keep your money invested for the long term, the goal is for these gains and losses to average out over time, ideally ending significantly in the black by the end of the investment period. We've added a default return of 6%, which is fairly conservative — feel free to adjust it to match your expectations for your own investment portfolio.

5. Enter how frequently you want your investment returns to compound. You can opt to match the compounding frequency to your contribution frequency — meaning, if you plan to make additional contributions on a monthly basis, you'd choose monthly compounding. If you plan to make annual contributions, you might opt for annual compounding. But daily compounding is likely to get you closest to estimating typical investment performance. Compounding at more frequent intervals leads to higher growth over time.

A note on calculating total investment returns vs. price returns

Something to consider when calculating investment return: Is it the price return or the total return?

Price return is the annualized change in the price of the stock or mutual fund. If you buy it for $50 and the price rises to $75 in one year, that stock price is up 50%. If the following year the price closes at $60, the stock price fell 20% that year. If it closes at $65 the third year, it increased by 8.3%.

Total return factors in regular cash payments from the investment, such as dividends. Over the past 30 years, the difference between the total return and price return of the S&P 500 has been about two percentage points annually, on average.

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