Predicting investment returns is a difficult process. To get an accurate picture, it is not enough to simply assume a certain return; you need to consider other factors, such as inflation and taxes, to determine what your investment will be worth in real terms over a number of years. This ROI calculator allows you to do just that. In addition to calculating your returns over time, this calculator also allows you to see which factors such as the economic climate, taxes and additional investments will affect your investment over time. You can also easily vary each of these factors to see how changes in one or more factors will affect your investments over time, and view the results for simple vs. interest compounded.
About return on investment
Investing is a complicated process. You need to understand how the different investment products work, what their level of risk is and what investment style you are comfortable with. You also have to consider taxes, inflation, fees, and the health of the economy. If you're not familiar with investing or including elements that can impact the returns an investment produces, try our investment returns tool.
What can you do with this calculator?
The ROI calculator can serve a number of investment purposes. For example:
- Predict how your investments could perform over time
- Measuring risk vs. reward by comparing two different investments with different returns
- Retirement planning and figuring out what kind of nest egg you have
- See how inflation can affect your investments
- Assess how investing additional amounts over time will impact your overall returns
- Calculate the impact of different income tax rates on your investment performance
- Calculating the effects of simple vs. interest compounded
Using the ROI calculator
To use this tool, enter the number of years you plan to hold an investment product, the expected rate of return, your initial investment amount, your annual investment amount, the current inflation rate, and your current investment tax rate. After you have entered these amounts, click on 'calculate'. This produces a graph. If you want a detailed overview of your investment scenario, click on the "view report" button.
Here is additional information that may be helpful when using the calculator:
- Return: This is the annual compound return on your investments. For the ten years ending in December 2015, the S&P 500's annualized return was 7.76 percent, including dividend reinvestment. From 1970 through 2015, the average rate was 10.5 percent, ranging from a twelve-month high of 61 percent (June 1982-83) and a low of -43 percent (March 2008-09). These figures should only be used to generate estimates; future results cannot be reliably predicted based on past trends.
- Annual investment: the additional amount you want to invest annually on top of your initial investment.
- Expected Inflation Rate: Enter the average inflation rate you expect during your investment. From 1925 to 2015, the average inflation rate was 2.9 percent based on the consumer price index.
- Tax Rate: Enter your total tax rate based on income, federal, state, local, etc.
When you enter your details, at the end of the specified time, the calculator will automatically determine the total value of your investment and display it in the blue bar at the top. If you change any of these values, e.g. by moving the green triangles, your investment total also changes immediately.
Clicking "View Report" will take you to a new page that shows a more detailed overview of the investment and its performance.
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What is an annual return?
The annual return is the amount you earn from an investment fund for an entire year. This is also called the annual percentage rate and should not be confused with calculations performed over a period of many years.
How do you make the annual return calculations?
The annual return is calculated based on the value of the fund at the beginning and end of the year. The difference between the two amounts (which represent the total money won or lost) is divided by the amount invested at the beginning of the year. You can use our investment calculator to calculate your annual return.
What is an ROI Calculator?
An investment return calculator is used to calculate the profit (or loss) of an investment over a specific period of time. A return on investment calculator works by finding the net difference between the initial value of the investment and its final value and then dividing this by the cost of the investment.
How do I make an average return calculation?
The average rate of return represents the average cash flow generated over the life of an investment. To make an average return calculation, add up all expected cash flows over the investment period and then divide by the number of years the investment is expected to last.
How much will $100,000 be worth in twenty years?
If you invest $100,000 at 6% annual interest, your original investment at the end of twenty years will be $320,714, bringing your earned interest over the two decades to $220,714.
What is an after-tax return?
This represents the actual financial return you will get from your investment, after adjusting for the effects of inflation and taxes. The return after tax is on the other side of the nominal return, where only the gross return is taken into account.
How do you make a return calculation after taxes?
The after-tax calculator takes the gross investment return and then subtracts the percentages of inflation and taxes over the investment period.
What is a personal returns calculator?
A personal return calculator uses your liquidity activity to provide an estimate of your investment. The money deposited and withdrawn from your investment account over time is categorized as cash flow, and the Personal Return Calculator estimates its impact on your actual returns.
Are there investment funds with a return of 12 percent over 10 years?
Yes there is. However, before investing in any of these mutual funds, it is important that you seek professional advice from an investment expert. There are just so many options to choose from, and you can't tell which ones are right for you just by looking at them.
How do I use the annual mutual fund return calculator?
Mutual fund calculators can help you estimate your return on mutual fund investments. To use a mutual fund annual return calculator, simply enter the investment amount, rate of return, and duration of the investment. The calculator shows you how much your investment will have appreciated at the end of the specified period.
