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Investment Return Calculator

Calculation Target:

Input a negative value for withdrawing.


years

Leave it as zero if you want to calculate before tax interest only.

%
Calculated Results
After Tax Return5.28
Before Tax Return7.04
Total Interest10,000
Total Contribution30,000
End Principal50,000
Related
Interest Portfolio Performance Return CD

Balance and Interest

Year Begin Principal Begin Balance Interest End Principal End Balance
1 20,000 20,000 1,199 26,000 27,199
Month120,00020,0008620,50020,586
Month220,50020,5868821,00021,174
Month321,00021,1749121,50021,765
Month421,50021,7659322,00022,359
Month522,00022,3599622,50022,955
Month622,50022,9559923,00023,553
Month723,00023,55310123,50024,154
Month823,50024,15410424,00024,758
Month924,00024,75810624,50025,365
Month1024,50025,36510925,00025,973
Month1125,00025,97311225,50026,585
Month1225,50026,58511426,00027,199
2 26,000 27,199 1,579 32,000 34,778
Month1326,00027,19911726,50027,816
Month1426,50027,81611927,00028,435
Month1527,00028,43512227,50029,058
Month1627,50029,05812528,00029,682
Month1728,00029,68212728,50030,310
Month1828,50030,31013029,00030,940
Month1929,00030,94013329,50031,573
Month2029,50031,57313630,00032,209
Month2130,00032,20913830,50032,847
Month2230,50032,84714131,00033,488
Month2331,00033,48814431,50034,132
Month2431,50034,13214732,00034,778
3 32,000 34,778 1,979 38,000 42,757
Month2532,00034,77814932,50035,428
Month2632,50035,42815233,00036,080
Month2733,00036,08015533,50036,735
Month2833,50036,73515834,00037,393
Month2934,00037,39316134,50038,053
Month3034,50038,05316335,00038,717
Month3135,00038,71716635,50039,383
Month3235,50039,38316936,00040,052
Month3336,00040,05217236,50040,724
Month3436,50040,72417537,00041,399
Month3537,00041,39917837,50042,077
Month3637,50042,07718138,00042,757
4 38,000 42,757 2,400 44,000 51,158
Month3738,00042,75718438,50043,441
Month3838,50043,44118739,00044,128
Month3939,00044,12819039,50044,817
Month4039,50044,81719240,00045,510
Month4140,00045,51019540,50046,205
Month4240,50046,20519841,00046,903
Month4341,00046,90320141,50047,605
Month4441,50047,60520442,00048,309
Month4542,00048,30920742,50049,017
Month4642,50049,01721143,00049,727
Month4743,00049,72721443,50050,441
Month4843,50050,44121744,00051,158
5 44,000 51,158 2,843 50,000 60,001
Month4944,00051,15822044,50051,877
Month5044,50051,87722345,00052,600
Month5145,00052,60022645,50053,326
Month5245,50053,32622946,00054,055
Month5346,00054,05523246,50054,787
Month5446,50054,78723547,00055,522
Month5547,00055,52223847,50056,261
Month5647,50056,26124248,00057,002
Month5748,00057,00224548,50057,747
Month5848,50057,74724849,00058,495
Month5949,00058,49525149,50059,246
Month6049,50059,24625450,00060,001

How to calculate Investment Return

The calculator will calculate the annualized IRR return that is considered as a good index to measure an invesment return. The IRR return use the cash flow of the whole investment life and discount it based on the time factor such that the net present value of the cash flow is equal to the initial investment based on this formula: \[ Initial = \sum_{n=1}^{n=m} \frac{F_n}{(1+IRR)^n} \] Where \( F_n \) is the investment Cash flow for year n (that is the Interest Earned - Contribution), m is the number of years of the investment.

How to invest

To manage your personal finance, investment is one of the most important tool for you to reach your goal. A healthly financial life almost always come along with a good investment. Here are a list of good tips of investment:
  • Set up a clear and realistic goal. Then start to invest for the goal as soon as possible. The investment process will need time to build wealth, by starting early will give you more time to grow your wealth. You can try to adjust the Investment Length to see how it will impact your end balance. Or you can try to calculate how long it will take to reach your goal using the calculator.
  • Seeking a better return. The difference of the investment return will make a big difference to the end balance given a long investment term. For example, put your money into a bank saving account might only give you a 2% return, but invest a REIT fund might give you a 8% or even higher return. You can try to use the calculator to change the return for a fixed time period to see how it will impact your end wealth.
  • Consider of investment risk and try to manage the risk. Investment will have a risk. Especially if you want to higher return. Normally, the higher return coming along with the higher risk. Therefore, to manage the risk is the most important point in the investment process. If one investment has 20% return in one year, but -2% in the next year, but the other investment has a stable return of 9% every year, you should select the later one because it is considered as lower risk than the first case. To separate the in flow of your investment by periodic contribution is a good way to manage the market timing risk.
  • Diversify your investment portfolio is another way to manage risk. If you put all you asset into one bucket and if that bucket has a problem, your whole portfolio is going down. For example, if you put all your asset in to stock market, and when the market clash, you will see you whole portfolio going down. By diversify, you can have one bucket offset the other if one is not performing well. Consider of the total wealth in the world is fixed, so when one section of investment world valued down, there will be most likely another section going up.