Acorns Investment Calculator

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Acorns Investment Growth Calculator

Understanding Your Acorns Investment Growth

The Acorns platform allows you to invest spare change and make regular contributions into diversified portfolios. This calculator helps you project the potential growth of your Acorns investments over time, considering your initial deposit, ongoing contributions, and an estimated rate of return.

How the Calculation Works

This calculator uses a compound interest formula adapted for periodic investments. The core logic involves calculating the future value of your initial investment and the future value of your series of monthly contributions separately, then summing them up.

  • Initial Investment Growth: The initial amount invested grows according to the compound interest formula: FV = PV * (1 + r)^n, where FV is Future Value, PV is Present Value (initial investment), r is the periodic interest rate, and n is the number of periods.
  • Monthly Contributions Growth: The regular monthly contributions are treated as an annuity. The future value of an ordinary annuity is calculated as: FV = P * [((1 + r)^n - 1) / r], where P is the periodic payment (monthly contribution), r is the periodic interest rate, and n is the number of periods.

In our calculator, the annual rate of return is converted into a monthly rate (by dividing by 12), and the number of years is converted into the total number of months (by multiplying by 12). This ensures that both the initial investment and monthly contributions are compounded appropriately over the specified duration.

Key Inputs Explained

  • Initial Investment ($): The lump sum you start with in your Acorns account.
  • Monthly Contribution ($): The fixed amount you plan to invest every month.
  • Expected Annual Rate of Return (%): This is an estimate of how much your investments might grow each year, on average. It's important to remember that actual market returns fluctuate and are not guaranteed. Past performance is not indicative of future results.
  • Investment Duration (Years): The total period you plan to keep your money invested.

Why Use This Calculator?

This tool provides a clear, data-driven outlook on how consistent investing with Acorns can potentially build wealth over the long term. It helps you:

  • Set realistic financial goals.
  • Understand the power of compounding.
  • Visualize the impact of different contribution levels and rates of return.
  • Stay motivated by seeing the potential future value of your savings and investments.

Disclaimer: This calculator provides an estimation based on the inputs provided and assumes a consistent rate of return. It does not account for taxes, fees, inflation, or market volatility, which can significantly impact actual investment returns. It is for illustrative purposes only and not financial advice.

function calculateInvestmentGrowth() { var initialInvestment = parseFloat(document.getElementById("initialInvestment").value); var monthlyContribution = parseFloat(document.getElementById("monthlyContribution").value); var annualRateOfReturn = parseFloat(document.getElementById("annualRateOfReturn").value) / 100; // Convert percentage to decimal var investmentYears = parseInt(document.getElementById("investmentYears").value); var resultElement = document.getElementById("result"); // Input validation if (isNaN(initialInvestment) || initialInvestment < 0 || isNaN(monthlyContribution) || monthlyContribution < 0 || isNaN(annualRateOfReturn) || annualRateOfReturn < 0 || isNaN(investmentYears) || investmentYears 0) { futureValueContributions = monthlyContribution * (Math.pow((1 + monthlyRate), numberOfMonths) – 1) / monthlyRate; } else { // Handle case where rate is 0 futureValueContributions = monthlyContribution * numberOfMonths; } totalGrowth = futureValueInitial + futureValueContributions; // Display the result resultElement.innerHTML = "Estimated Future Value: $" + totalGrowth.toFixed(2); }

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