Bankrate Investment Calculator

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Bankrate Investment Calculator

Investment Projection:

Total Future Value:

Total Contributions:

Total Interest Earned:

function calculateInvestment() { var initialInvestment = parseFloat(document.getElementById('initialInvestment').value); var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value); var annualReturnRate = parseFloat(document.getElementById('annualReturnRate').value); var investmentPeriod = parseFloat(document.getElementById('investmentPeriod').value); if (isNaN(initialInvestment) || isNaN(monthlyContribution) || isNaN(annualReturnRate) || isNaN(investmentPeriod) || initialInvestment < 0 || monthlyContribution < 0 || annualReturnRate < 0 || investmentPeriod <= 0) { alert('Please enter valid positive numbers for all fields.'); document.getElementById('investmentResult').style.display = 'none'; return; } var monthlyRate = (annualReturnRate / 100) / 12; var totalMonths = investmentPeriod * 12; var futureValueOfLumpSum = initialInvestment * Math.pow((1 + monthlyRate), totalMonths); var futureValueOfAnnuity; if (monthlyRate === 0) { futureValueOfAnnuity = monthlyContribution * totalMonths; } else { futureValueOfAnnuity = monthlyContribution * ((Math.pow((1 + monthlyRate), totalMonths) – 1) / monthlyRate); } var totalFutureValue = futureValueOfLumpSum + futureValueOfAnnuity; var totalContributionsMade = initialInvestment + (monthlyContribution * totalMonths); var totalInterestEarned = totalFutureValue – totalContributionsMade; document.getElementById('futureValue').innerText = '$' + totalFutureValue.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); document.getElementById('totalContributions').innerText = '$' + totalContributionsMade.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); document.getElementById('totalInterestEarned').innerText = '$' + totalInterestEarned.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ","); document.getElementById('investmentResult').style.display = 'block'; }

Understanding the Bankrate Investment Calculator

Investing is a powerful way to grow your wealth over time, but understanding how your money can compound can be complex. Our Bankrate Investment Calculator simplifies this process, allowing you to project the potential future value of your investments based on your initial capital, regular contributions, expected rate of return, and investment horizon.

How It Works

This calculator uses the principles of compound interest to estimate how much your investment could be worth. Compound interest means earning returns not only on your initial investment but also on the accumulated returns from previous periods. This "interest on interest" effect is what makes long-term investing so powerful.

Key Input Fields Explained:

  • Initial Investment ($): This is the lump sum amount you start with. It could be savings you've accumulated, a bonus, or an inheritance. The larger your initial investment, the more it can compound over time.
  • Monthly Contribution ($): This represents the amount of money you plan to add to your investment regularly, typically on a monthly basis. Consistent contributions, even small ones, can significantly boost your future wealth due to dollar-cost averaging and compounding.
  • Annual Rate of Return (%): This is the average percentage gain you expect your investments to generate each year. This is an estimate and can vary widely based on the type of investment (stocks, bonds, mutual funds, real estate), market conditions, and risk tolerance. A common historical average for diversified stock portfolios is 7-10% annually, but past performance is not indicative of future results.
  • Investment Period (Years): This is the total number of years you plan to keep your money invested. The longer your investment period, the more time your money has to compound, leading to potentially much larger returns.

Understanding Your Results:

  • Total Future Value: This is the estimated total amount your investment will be worth at the end of your specified investment period, including your initial investment, all monthly contributions, and the accumulated returns.
  • Total Contributions: This shows the sum of your initial investment and all the monthly contributions you've made over the investment period. It represents the actual money you've put into the investment.
  • Total Interest Earned: This is the difference between your Total Future Value and your Total Contributions. It represents the wealth generated purely from the growth of your investments, thanks to compounding.

Example Scenario:

Let's say you start with an Initial Investment of $10,000. You commit to making a Monthly Contribution of $200. You anticipate an Annual Rate of Return of 7% and plan to invest for 20 years.

Using the calculator, you would find:

  • Total Future Value: Approximately $150,000 – $160,000
  • Total Contributions: $10,000 (initial) + ($200 * 240 months) = $58,000
  • Total Interest Earned: Approximately $92,000 – $102,000

This example clearly illustrates the power of compounding and consistent contributions. While you only contributed $58,000 of your own money, the investment grew significantly beyond that due to the annual rate of return.

Important Considerations:

This calculator provides an estimate and does not account for taxes, inflation, or investment fees, which can impact your actual returns. Market returns are not guaranteed and can fluctuate. It's always wise to consult with a financial advisor to create a personalized investment strategy.

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