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Updated Jan 04, 2024

Investment Returns Calculator

Mike Berner
Written By: Mike BernerSenior Analyst & Expert on Business Operations
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Determining investment returns over time can be challenging and typically involves many complicated mathematical formulas. However, our calculator makes it easy to compute investment returns by plugging in a handful of numbers. You can use this investment returns calculator to compute the expected value of a retirement portfolio or a particular investment over time. 

Key Terms


This represents the period over which an investment is expected to grow. 

Rate of return

The compound annual growth rate refers to how much, on average, the investment is expected to grow each year in percentage terms. Over the long run, United States stock market returns average approximately 10% annually (or 7% “real returns” if you include inflation). Bonds average around 5% annually or 3% after inflation. 

Initial investment

This is the total capital invested on day one of the time period in question. 

Additional investments

Any additional contributions you intend to make are added to this box. These can be annual, quarterly, monthly, biweekly or weekly amounts. 

Frequency of contributions

This refers to how often you intend to make additional contributions (see “additional investment” above).

Inflation rate

The inflation rate refers to how much, on average, the prices of goods and services are expected to increase during the specified period. Over the last century, inflation in the U.S. has averaged around 3% annually. 

Tax rate

Investment returns in the U.S. can be subjected to taxes, both at the state and federal levels. Capital gains taxes usually apply when you sell an investment or receive a dividend. These taxes vary by state and income level, but typically hover around 15%-20%. Business owners can leverage investment vehicles like a Roth individual retirement account to protect investments from taxes. 

Inflation adjustment

By checking this box, you assume that you will increase your investment contributions with inflation. 

Compound interest return

With compound interest, your returns are added back to your initial capital. Subsequently, you earn returns on both your initial capital and any interest that accumulates. Over time, the total capital grows exponentially as you earn interest on interest.  

Simple interest return

With simple interest, returns are not added back to the initial capital. Instead, you only generate returns based on the initial capital. Over time, the total capital grows at a fixed, linear rate. 

Total invested capital

This is the total amount of money you put in over time, including the initial investment and additional contributions. 

Investment final total

This is the total value of the investment at the end of the specified time period. If you check the “show value after inflation” box, the calculator reveals the value of the investment in today’s dollars. 

What is return on investment (ROI)?

ROI is a metric that measures an investment’s profitability. Typically, ROI is presented as a percentage. ROI is calculated by taking the net gain of the investment and dividing it by the cost of the investment, then multiplying the result by 100. A high ROI means that the investment generates a lot of profit compared to its cost. 

What factors affect your ROI?

Many factors affect ROI, including the amount of capital invested, the time period of the investment, the rate of return, inflation and any applicable taxes. You can maximize ROI by going for investments with higher rates of return, staying invested for the long run and minimizing taxes and other costs. 

Mike Berner
Written By: Mike BernerSenior Analyst & Expert on Business Operations
Mike Berner brings to over half a decade of experience as a finance expert, having previously served as an economic analyst for the U.S. Army Corps of Engineers. His expertise lies in conducting quantitative analysis and research, providing invaluable guidance for navigating the modern financial landscape. Berner, who has a bachelor's degree in economics and a bachelor of business administration in finance, enjoys simplifying complicated financial concepts for entrepreneurs and business owners. From deciphering the intricacies of business loans and accounting to identifying the best payroll systems and credit card processors, he offers comprehensive insights tailored to meet diverse business needs. Beyond dedicating himself to exploring and evaluating the latest financial solutions, Berner has also become adept at explaining how businesses can take advantage of artificial intelligence tools. His passion for sharing knowledge extends to various platforms, including Substack, TikTok and YouTube, where he imparts tips and strategies on topics like sales tactics, savvy investing and tax saving.
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