Worked example
Invest $500 a month for 25 years at an assumed 7% a year and the estimated value is $407,399. You put in $150,000; the other $257,399 is assumed growth.
- Monthly investment
- $500
- Assumed return (per year)
- 7%
- Time period
- 25 years
- Amount invested
- $150,000
- Estimated returns
- $257,399
- Estimated value
- $407,399
| Year | Invested so far | Estimated returns | Estimated value |
|---|---|---|---|
| 1 | $6,000 | $232 | $6,232 |
| 2 | $12,000 | $915 | $12,915 |
| 3 | $18,000 | $2,082 | $20,082 |
| 4 | $24,000 | $3,766 | $27,766 |
| 5 | $30,000 | $6,005 | $36,005 |
| 10 | $60,000 | $27,047 | $87,047 |
| 15 | $90,000 | $69,406 | $159,406 |
| 20 | $120,000 | $141,983 | $261,983 |
| 25 | $150,000 | $257,399 | $407,399 |
How to use this calculator
- Enter how much you plan to invest each month.
- Enter the annual return you expect — and try a more conservative figure, too.
- Choose how many years you’ll keep contributing.
- Read the projected balance, your total contributions and the growth.
- Switch chart views or open the year-by-year table.
Contributions are compounded monthly at the start of each month: $500 a month at 7% for 25 years comes to $407,399.
Frequently asked questions
What rate of return should I use?
There’s no right answer — markets don’t deliver a steady return, and past results don’t guarantee future ones. Run a cautious case as well: at 4% instead of 7%, $500 a month for 25 years grows to about $257,922 instead of $407,399.
How much does starting earlier help?
Ten extra years can matter more than doubling your contribution. Investing $500 a month for 35 years instead of 25 grows to about $905,780; doubling to $1,000 a month for 25 years reaches $814,797.
Is this the same as dollar-cost averaging?
Yes, in practice. Investing a fixed amount on a schedule means you buy more shares when prices are low and fewer when they’re high. This calculator assumes one steady return; your real balance will rise and fall with the market.
Does it account for taxes or fees?
No. Results are before taxes, fund expenses and advisory fees. How your gains are taxed depends on the account — a taxable brokerage account, a 401(k) or an IRA each work differently.
When are contributions assumed to be made?
At the start of each month, so every contribution earns a full month of growth. Contributing at the end of the month would give a slightly lower figure.