Advanced Investment Return Calculator
Find out the difference between Simple and Compound Interest! See how big an impact your tax rates and inflation have on your savings over time!
If you have already used our Becoming A Millionaire Calculator, you can use your targeted Expected Investment Return numbers in this calculator to see how to make that return happen!
Once you see how moving the rate of return affects your profits, try checking out our Compound Interest Calculator to see how the different types of compounding can have a big impact on the final return!
Check out some of our other calculators:
Investment returns Inputs: Press spacebar to hide inputs |
Annual Investment Returns press spacebar to hide graph |
Definitions
- Years
- The number of years you wish to analyze. This can be any number from one to one hundred.
- Rate of return
- This is the annually compounded rate of return you expect from your investments before taxes. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending Dec. 1st, 2014, had an annual compounded rate of return of 8.06%, including reinvestment of dividends. From 1957 through 2021, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.88%. Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
- Initial investment
- Total you currently have invested that should be included in this analysis.
- Annual investments
- The amount you will contribute each year to your investments. If you check the box to adjust this amount for inflation, your annual investment will increase each year by the inflation rate.
- Inflation rate
- This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2014 the CPI has a long-term average of 3.0% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2022 the CPI was 5.8% annually as reported by the Minneapolis Federal Reserve.
- Tax rate
- The percentage of your investment return you will pay in taxes. Your taxes are assumed to be payable annually, at the end of the year.
- Inflation adjustment
- Check this box to increase your future investment amounts for inflation.
- Show values after inflation
- Check this box to show all totals after inflation. By choosing this option you will see the value of your investments in terms of purchasing power, if you had that amount available today.
- Compound Interest
- Interest on an investment's interest, plus previous interest. The more frequently this occurs, the sooner your accumulated interest will generate additional interest. You should check with your financial institution to find out how often interest is being compounded on your particular investment.
- Compounded interest return
- Total after-tax return if your investment profit is compounded annually.
- Simple interest return
- Total after-tax return if your investment profit is simple interest with no compounding.
- Total invested capital
- Total you have invested. This includes your initial investment and all periodic investments.
- Investment final total
- Your investments total ending value. If you have checked the box to show values after inflation, this amount is the total value of your investment in today's dollars. If this box is unchecked, it will show the actual value of the investment.
Take The Quiz!
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