Investment Calculator Project compound growth, compare asset mixes, and model real returns — with 2025 benchmarks and ris...
Investment Calculator
Project compound growth, compare asset mixes, and model real returns — with 2025 benchmarks and risk-adjusted insights.
Lump Sum (Compound Interest)**:
$$FV = PV \times \left(1 + \frac{r}{n}\right)^{nt}$$
Regular Contributions (Ordinary Annuity)**:
$$FV = PMT \times \frac{(1 + r)^t - 1}{r}$$
Inflation Adjustment**:
$$\text{Real FV} = \frac{\text{Nominal FV}}{(1 + \pi)^t}$$
Example** ($10K @ 7.5%, 30 yrs): $$FV = 10{,}000 \times (1.075)^{30} = \mathbf{\$87{,}540}$$ Adjusted for 3% inflation: **$35,722** real purchasing power
✅ Pro Tip**: Fees compound too — 1% vs. 0.25% on $500/mo for 30 yrs = **$214,000 difference**.
⚠️ Avoid these common mistakes:
- Nominal return focus** — 10% return − 3% inflation = 6.8% real, −25% tax = 5.1% after-tax real
- Late starting** — $200/mo from 25 → 65 = $650K $400/mo from 35 → 65 = $520K (despite 2× contribution)
- Survivorship bias** — “S&P 500 returned 10%” ignores delisted losers
- Ignoring sequence risk** — retiring in 2000 required 3.5% safe withdrawal (not 4%)
✅ Smart Investor Tips**:
- Use low-cost **index funds** (Vanguard, Fidelity ZERO)
- Rebalance annually — sell high, buy low
- Harvest tax losses in taxable accounts
| Portfolio | Nominal Return | Real Return | Risk (Std Dev) |
|---|---|---|---|
| S&P 500 | 9.8% | 6.8% | 15% |
| 60/40 Balanced | 7.5% | 4.5% | 10% |
| Bonds (AGG) | 4.2% | 1.2% | 6% |
| Worst 10-Yr (2000–2009) | 0.7% | -2.2% | — |
📉 Rule of 72 & Volatility Drag**:
- 7.5% return → doubles in **9.6 years**
- 15% std dev → ~1.1% annual CAGR drag
➡️ Lump Sum
“$10K invested today @ 7.5% for 30 yrs — what’s it worth?”
➡️ Regular Contributions
“$500/mo to my brokerage for 30 yrs @ 7.5% — how much will I have?”
➡️ Asset Allocation
See how 80/20 vs. 60/40 impacts projected return and risk.
➡️ Inflation-Adjusted
“$651K nominal → how much *real* spending power in 2055?”
Note: Uses exact compound formulas. Volatility drag estimated via $ \sigma^2/2 $. Fees deducted annually.