Annual rate on investment (investment returns) calculator

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 December 31^st 2024, had an annual compounded rate of return of 14.9%, including reinvestment of dividends. From January 1, 1970 to December 31^st 2024, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.2% (source: www.spglobal.com). 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 pay 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. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.

Initial investment

Total you currently have invested that should be included in this analysis.

Additional investments

The amount you will contribute to your investments each period. If you check the box to adjust this amount for inflation, your annual investment will increase each year by the inflation rate.

Frequency of contributions

How often you make contributions to your account. The options include weekly, bi-weekly, monthly, quarterly and annually. This calculator assumes that you make your contributions at the beginning of each period.

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 2024 the CPI has a long-term average of 3.0% annually. Over the last 40 years the highest CPI recorded was 13.5% in 1980. For the 12 months ending October 31^st 2024 the CPI for All Urban Consumers (CPI-U) was 3.2% as reported by the U.S. Bureau of Labor Statistics.

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 investment's 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.