# Investment Calculator

Use our investment calculator to calculate how much your money may grow and return over time when invested in stocks, mutual funds or other investments.

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## About this investment calculator

Written by Chris Davis
Assigning Editor
Edited by Arielle O'Shea
Lead Assigning Editor
Fact Checked

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." Thanks to compounding returns, the longer you leave your money invested, the higher your potential returns could be. Use this investment calculator to estimate how your investment could grow over time.

## Investment calculator example

Imagine you came into some money and want to invest \$5,000. To maximize investment growth, you plan to invest an additional \$50 per month over the next 5 years. You anticipate an annualized average return of 5%, which is just your investment profit expressed as an annual rate. Here's how to input that in the calculator.

1. Enter an initial investment amount of \$5,000.

2. Enter your regular contributions. Include the amount of your monthly \$50 contributions after selecting the “monthly” option.

3. Choose how long your investment will grow. If you’re investing in stocks, staying invested for at least five years is generally a good idea to weather any post-purchase volatility. Enter an amount of 5 years.

4. Enter your expected rate of return. As 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. But for this example, set the return to 5%.

5. Enter how frequently your investment will compound. Some financial products, like savings accounts, will have a specific compounding frequency to input here. For stocks, the compounding frequency is technically daily. If a stock valued at \$100 rises 1% on Monday, it will be valued at \$101 on Tuesday morning — a \$1 gain. If it rises 1% again on Tuesday, it will be valued at \$102.01 on Wednesday morning, marking a gain of \$1.01. However, with stocks, it's worth noting it works the other way, too. Losses also compound daily.

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## Investment calculator key terms

 Initial investment The lump sum of money you will use to buy an investment, such as stocks. Expected rate of return Expressed as a percentage, this is the amount you expect to receive from your investment. If your investment is \$100 and you expect a 6% rate of return, you would earn \$6 at the end of the investment period. Dollar-cost averaging Dollar-cost averaging is a strategy in which you invest set amounts at regular intervals, such as \$100 per month, rather than a lump sum all at once. Total return Total return is the total amount of profit (or loss) an investment earns, including dividends, interest or other forms of distribution. This differs from price return, which only factors in a stock's change in price, and doesn't include additional distributions.