Investment Calculator

Compound interest is often called the 'eighth wonder of the world.' It's interest calculated on both your initial principal and accumulated interest. Over time, this creates exponential growth. For example, $10,000 invested at 7% annual return becomes $76,123 in 30 years without any additional contributions. The Rule of 72 is a quick way to estimate doubling time: divide 72 by your interest rate to get approximate years to double your money.

CAGR (Compound Annual Growth Rate) measures the smoothed annual growth rate of an investment over time, accounting for compounding. Unlike simple average return, CAGR shows what your investment actually grew at each year to reach its final value. For example, an investment that goes up 100% then down 50% has a 0% CAGR despite a 25% average return. CAGR is the more accurate measure of actual investment performance. Note: CAGR cannot be calculated when beginning or ending values are negative.

DRIP (Dividend Reinvestment Plan) automatically reinvests your dividend payments to buy more shares of the same stock or fund. This creates a compounding effect: more shares mean more dividends, which buy more shares. Over decades, DRIP can dramatically increase your total returns. Studies show reinvested dividends have contributed nearly half of the S&P 500's total return since 1930.

The '100 minus age' rule is a widely-used starting point for asset allocation (e.g., a 35-year-old would hold 65% stocks), but it's a guideline—not personalized advice. Modern planners often use '120 minus age' due to longer lifespans. However, your actual allocation should consider income stability, existing assets, debts, time horizon, and specific goals. Our calculator uses this rule adjusted for risk tolerance, with a methodology note explaining its limitations. For significant portfolios, consult a financial advisor.

The 50/30/20 rule allocates after-tax income as follows: 50% for essentials (housing, food, utilities), 30% for discretionary spending (entertainment, dining out), and 20% for savings and debt repayment. This provides a framework for determining how much you can realistically save toward your goals. Our Savings Goal Calculator helps you understand how that 20% can grow over time.

Yes, all calculations happen locally in your browser. Your financial data is never uploaded to any server. You can use this calculator completely offline once the page is loaded, ensuring complete privacy for your financial planning.

Investment calculators provide estimates based on the assumptions you input—they're planning tools, not predictions. Key limitations: (1) Results assume consistent annual returns, but real markets fluctuate significantly year-to-year; (2) Outputs are in nominal (future) dollars unless specified—inflation reduces purchasing power by ~2-3% annually; (3) No calculator can predict actual market performance. Use these tools to understand how compounding works and compare scenarios, but recognize that your actual results will vary.

No, these calculators show pre-tax returns. Taxes can significantly impact actual returns: capital gains (0-20% depending on holding period and income), dividend taxes (0-23.8% for qualified dividends), and withdrawal taxes for retirement accounts. Tax impact varies by account type (taxable vs. 401k vs. Roth IRA) and jurisdiction. For accurate after-tax planning, consider consulting a tax professional. Our rebalancing suggestions also don't account for capital gains taxes triggered by selling appreciated positions.