The Financial Projection Calculator is a powerful tool designed to help you visualize the potential growth of your investments over time. Whether you're planning for retirement, saving for a major purchase, or simply want to understand the long-term impact of your financial decisions, this calculator can provide valuable insights. It takes into account your initial investment, regular contributions, the expected rate of return, and the duration of your investment horizon.
This calculator is particularly useful for:
Retirement Planning: Estimating how much your savings might grow to by your target retirement age.
Long-Term Savings Goals: Projecting the future value of savings for goals like a down payment on a house, education funds, or other significant purchases.
Investment Strategy Evaluation: Comparing the potential outcomes of different investment scenarios or contribution levels.
How the Calculation Works
The calculator uses a compound interest formula, adjusted for regular annual contributions. The core principle is that your money earns returns not only on the initial investment but also on the accumulated earnings from previous periods, and on your subsequent contributions as they are added.
The formula for the future value (FV) of an investment with regular contributions is an extension of the compound interest formula. It can be broken down into two parts: the future value of the initial lump sum and the future value of the annuity (the stream of annual contributions).
Let:
$PV$ = Present Value (Initial Investment Amount)
$C$ = Annual Contribution Amount
$r$ = Annual Growth Rate (as a decimal, e.g., 7.5% is 0.075)
$n$ = Number of Years
The future value of the initial investment is calculated as:
$FV_{initial} = PV * (1 + r)^n$
The future value of the annual contributions (an ordinary annuity) is calculated as:
$FV_{annuity} = C * [((1 + r)^n – 1) / r]$
The total projected future value is the sum of these two components:
$FV_{total} = FV_{initial} + FV_{annuity}$
If the annual growth rate ($r$) is 0, the formula simplifies to:
$FV_{total} = PV + (C * n)$
Note: Values are rounded for simplicity in the example. The calculator will provide precise results.
Disclaimer: This calculator provides a projected estimate based on the inputs provided. It is for informational purposes only and does not guarantee future results. Investment returns are not guaranteed and can fluctuate. Consult with a qualified financial advisor for personalized financial advice.
function calculateProjection() {
var initialInvestment = parseFloat(document.getElementById("initialInvestment").value);
var annualContribution = parseFloat(document.getElementById("annualContribution").value);
var projectedGrowthRate = parseFloat(document.getElementById("projectedGrowthRate").value);
var numberOfYears = parseFloat(document.getElementById("numberOfYears").value);
var resultDiv = document.getElementById("result");
var resultValueDiv = document.getElementById("result-value");
var disclaimerParagraph = document.getElementById("disclaimer");
// Clear previous results and error messages
resultDiv.style.display = "none";
resultValueDiv.textContent = "";
disclaimerParagraph.textContent = "";
// Input validation
if (isNaN(initialInvestment) || initialInvestment < 0) {
alert("Please enter a valid non-negative number for Initial Investment.");
return;
}
if (isNaN(annualContribution) || annualContribution < 0) {
alert("Please enter a valid non-negative number for Annual Contribution.");
return;
}
if (isNaN(projectedGrowthRate) || projectedGrowthRate < -100) { // Allow negative growth, but not less than -100%
alert("Please enter a valid number for Projected Annual Growth Rate (e.g., 7.5 for 7.5%).");
return;
}
if (isNaN(numberOfYears) || numberOfYears <= 0) {
alert("Please enter a valid positive number for Number of Years.");
return;
}
var rate = projectedGrowthRate / 100;
var futureValue;
if (rate === 0) {
// Simple calculation if growth rate is zero
futureValue = initialInvestment + (annualContribution * numberOfYears);
} else {
// Calculate future value of the initial investment
var fvInitial = initialInvestment * Math.pow((1 + rate), numberOfYears);
// Calculate future value of the annuity (annual contributions)
var fvAnnuity = annualContribution * ((Math.pow((1 + rate), numberOfYears) – 1) / rate);
// Total future value
futureValue = fvInitial + fvAnnuity;
}
// Format the result to two decimal places and add currency symbol
var formattedFutureValue = "$" + futureValue.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resultValueDiv.textContent = formattedFutureValue;
disclaimerParagraph.textContent = "This projection is an estimate based on your inputs and does not guarantee future results. Investment values can fluctuate.";
resultDiv.style.display = "block";
}