Mutual Fund Calculator

At a 7% average annual return compounded monthly, $500/month alone grows to about $260,464 after 20 years. Starting with $10,000 on top of that brings the projected balance to roughly $300,851. Total contributions are $130,000 ($10,000 initial + $120,000 in monthly deposits), so about $170,851 of the ending balance is investment growth.

The projection combines two future-value formulas: the lump sum compounds as P(1+r)^n, and each monthly contribution compounds as an ordinary annuity, PMT × (((1+r)^n − 1) / r), where r is the monthly rate (annual return ÷ 12) and n is the total number of months. Contributions are assumed invested at the end of each month.

For long-horizon projections, broad stock index funds are commonly modeled at 6–8% per year (about 7% after inflation historically), balanced funds around 5–6%, and bond funds lower. The calculator compounds the rate you enter, so run several scenarios — a conservative, expected, and optimistic case — rather than relying on one number.

Nominal value is the raw dollar balance at the end of the period. Real value divides it by (1 + inflation)^years, expressing it in today’s purchasing power — what the money could actually buy. At 2.5% average inflation, $300,851 in 20 years has the spending power of about $183,600 today.

No — the projection assumes a gross steady annual return with no expense ratios, loads, transaction costs, or taxes. A fund’s expense ratio drags directly on returns: a 1% annual fee on this 20-year example reduces the ending balance by roughly $37,000. Enter a net-of-fees return to approximate the effect, and remember taxable accounts owe tax on dividends and realized gains.