How this calculator works
Each period applies the nominal annual return divided by the number of periods per year, then adds a contribution. Earnings stay invested. The interest output represents modelled investment earnings and can be negative. Market volatility, fees, tax and inflation are outside this projection.
Formula
F = P(1+r/m)^N + C((1+r/m)^N - 1)/(r/m). With r = 0, F = P + NC. Earnings = F - P - NC. P is invested initially, C is added each period, r is the nominal annual rate as a fraction, m is periods per year and N is elapsed periods.
Worked example
Investing $10,000 and contributing $100 monthly for 120 months at a constant 6% nominal annual return produces $34,581.90. Of that balance, $12,581.90 is modelled earnings. With zero return, $1,000 plus twelve $50 contributions becomes $1,600.
Advertisement
Frequently asked questions
Is the annual rate an effective annual return?
This input is nominal and is divided by the frequency. For example, 6% compounded monthly uses 0.5% per month, which gives an effective annual return slightly above 6%.
Does this predict future market performance?
No. A constant rate is a scenario assumption. Actual returns vary, and the order of gains and losses affects a portfolio receiving contributions.
Can I include an initial lump sum only?
Yes. Enter the lump sum as the opening balance and set the deposit to $0.