S&P 500 Investment Calculator
Project your future wealth based on historical S&P 500 performance and compound growth.
Estimated End Balance
$401,634.42
Total Contributions
$130,000
Total Capital Gains
$271,634
How the S&P 500 Calculator Works
The Standard & Poor's 500 (S&P 500) is a stock market index tracking the performance of 500 large companies listed on stock exchanges in the United States. Investing in an S&P 500 index fund is one of the most popular strategies for long-term wealth building due to its historical reliability and diversification.
Understanding the Math of Compounding
This calculator uses the compound interest formula for monthly contributions to estimate your future portfolio value. The formula applied is:
FV = P * (1 + r/n)^(nt) + PMT * [((1 + r/n)^(nt) – 1) / (r/n)]
- P: Your initial principal (Starting balance).
- PMT: Your monthly contribution amount.
- r: Annual expected growth rate (decimal).
- n: Number of times interest is compounded per year (12 for monthly).
- t: Total number of years.
Realistic Expectations and Historical Data
Historically, the S&P 500 has delivered an average annual return of approximately 10% since its inception in 1957 through the end of 2023. However, it is important to consider two variations:
- Nominal Return: Usually around 10%, which does not account for purchasing power loss.
- Real Return: Usually around 7%, which adjusts for inflation. If you want to see what your money will "feel like" in today's dollars, use 7% in the calculator.
Example Calculation
If you start with $5,000, contribute $300 every month, and leave it in the S&P 500 for 30 years at an average 10% return:
- Total Contributed: $113,000
- Final Value: ~$732,000
- Total Growth: $619,000 (roughly 84% of your final balance is interest!)
This demonstrates the "snowball effect" of long-term index fund investing.
function calculateSP500() {
var principal = parseFloat(document.getElementById('initialPrincipal').value);
var monthly = parseFloat(document.getElementById('monthlyDeposit').value);
var years = parseFloat(document.getElementById('investmentYears').value);
var annualRate = parseFloat(document.getElementById('annualReturn').value);
// Validation
if (isNaN(principal) || isNaN(monthly) || isNaN(years) || isNaN(annualRate)) {
alert("Please enter valid numerical values.");
return;
}
// Monthly rate and periods
var r = annualRate / 100 / 12;
var n = 12;
var t = years;
var totalMonths = t * 12;
var futureValue = 0;
if (r === 0) {
// Zero interest case
futureValue = principal + (monthly * totalMonths);
} else {
// Compound interest with monthly contributions formula
// FV = P(1+r)^n + PMT * [((1+r)^n – 1) / r]
var principalGrowth = principal * Math.pow(1 + r, totalMonths);
var contributionGrowth = monthly * (Math.pow(1 + r, totalMonths) – 1) / r;
futureValue = principalGrowth + contributionGrowth;
}
var totalInvested = principal + (monthly * totalMonths);
var totalGains = futureValue – totalInvested;
// Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById('endBalance').innerText = formatter.format(futureValue);
document.getElementById('totalContrib').innerText = formatter.format(totalInvested).split('.')[0];
document.getElementById('totalGains').innerText = formatter.format(totalGains).split('.')[0];
}
// Initial calculation on load
window.onload = function() {
calculateSP500();
};