Investment Calculator

By Tax & Finance Desk · Updated July 25, 2026

See how your money grows when compound interest goes to work. Enter a starting balance, a monthly contribution, a time horizon, and an expected annual return — the calculator projects your ending balance and, just as importantly, shows how much of it came from your own contributions versus interest earned on top of them.

Starting balance ($) Monthly contribution ($) Years Annual return (%)

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Ending balance

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You put in

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Interest earned

▮ Contributions▮ Interest

Estimate only. Nominal growth with monthly compounding, before inflation, fees, and taxes. Not investment advice.

Why compounding is the closest thing to a free lunch in finance

The default figures above tell a striking story. Start with $10,000, add $500 a month, and earn 7% a year for 30 years, and you end with roughly $790,000. Of that, only about $190,000 is money you actually contributed — the other roughly $600,000 is interest earned on your money and on the interest itself. That is the entire case for starting early and staying invested: time does far more heavy lifting than the size of any single contribution.

The mechanism is simple but powerful. In year one your returns are earned only on your balance. In year two they are earned on your balance plus last year's returns. Extend that over decades and the growth curve bends sharply upward. Doubling your time horizon does not double your ending balance — it can multiply it several times over.

The tax angle most calculators ignore

Where you hold your investments matters almost as much as what you hold. In a taxable brokerage account, dividends are taxed yearly and profits face capital-gains tax when you sell. In a traditional 401(k) or IRA, growth is tax-deferred and you pay ordinary income tax only on withdrawal. In a Roth account, qualified growth comes out completely tax-free. On a portfolio that grows to several hundred thousand dollars, choosing tax-advantaged accounts first can be worth tens of thousands of dollars in avoided tax — which is why it is one of the highest-return decisions an ordinary investor can make.

Key takeaways

Over long horizons, most of a portfolio's value comes from compounding, not from contributions.
Starting earlier beats contributing more later, because time is the most powerful variable.
Model both a conservative and an optimistic return to see the realistic range.
Holding long-term investments in tax-advantaged accounts can save tens of thousands in tax.

Frequently asked questions

How does compound interest grow my investment?

Compound interest earns returns on your original money and on the returns it has already generated. Each period the balance grows, so the next period's return is larger. Over decades this snowball means most of a long-term portfolio's value often comes from growth rather than contributions.

What rate of return should I assume?

Historically a diversified U.S. stock portfolio has returned roughly 7% a year after inflation and about 10% before inflation over long periods. Any single year varies widely and past performance is no guarantee, so model a conservative and an optimistic rate.

Are investment gains taxed?

Usually yes, depending on the account. Taxable brokerage accounts owe capital gains on sale and income tax on dividends; traditional 401(k)/IRA growth is tax-deferred; Roth growth is tax-free if qualified.

Does this calculator account for inflation or fees?

No. It shows nominal growth before inflation, fees, and taxes. To approximate real purchasing power, enter a return net of inflation (e.g. 5% instead of 8%).