Project investment growth from an initial balance, monthly contributions and return.
UNDERSTAND THE ANSWER
How is this calculated?
The projection compounds a constant net annual return monthly and adds equal contributions at the end of each month. Net return is expected return minus annual fee.
Future value with contributionsFV = Initial growth + Future value of monthly contributions
A practical example
$10,000 invested with $500 monthly contributions for 20 years at a 7% return can grow to more than $270,000 before taxes.
Calculation assumptions
Return and fees remain constant and compound monthly.
Contributions occur at the end of each month.
Taxes, inflation, volatility and contribution increases are excluded.