Investment Return Calculator
Evaluate index funds, stocks, and mutual funds. Solve for future value, total return (ROI), or CAGR while accounting for periodic contributions, annual fee ratios, tax drags, and dividend reinvestment.
Advanced Insights (Optional)
Improve the accuracy of your personalized financial diagnostics.
| Scenario | Profile | Projected Portfolio Value |
|---|---|---|
Base Settings | Default inputs and growth assumptions | $371,570 |
Conservative | Lower yield, higher inflation, haircuts | $331,562 |
Optimistic | Favorable yield, lower inflation, growth | $404,857 |
Stress Test | Severe economic crash and high inflation | $295,857 |
How to Use the Investment Return Calculator
Building long-term wealth depends heavily on compounding returns, fee efficiency, and tax strategies. The Investment Return Calculator computes the absolute return (ROI) and annualized growth rate (CAGR) of any portfolio, factoring in recurring contributions, dividend reinvestment, expense ratio fees, and capital gains taxes.
- Scenario Mode: Model projections under different hypothetical market conditions.
- Solve For: The target variable to calculate (Ending Portfolio Value, ROI, or CAGR).
- Initial Investment ($): The starting amount of capital you invest at year 0.
- Periodic Contribution ($): How much regular capital you add to the investment portfolio.
- Contribution Frequency: How often periodic contributions are added to the investment portfolio.
- Contribution Timing: Whether regular contributions are added at the beginning or end of each period.
- Expected Annual Return (%): The expected annual nominal investment return rate.
- Annual Dividend Yield (%): The annual yield distributed as dividends.
- Reinvest Dividends: Toggle to reinvest dividend payments or pay them out as cash.
- Holding Duration (Years): The length of time the investment is held.
- Annual Expense Ratio / Fees (%): The annual fee rate charged by the fund managers.
- Gains / Dividend Tax Rate (%): The tax rate applied to distributed dividends and realized capital gains.
- Compounding Frequency: How frequently interest and returns are compounded annually.
- Adjust for Inflation: Whether to adjust future projections to real purchasing power values.
- Expected Inflation Rate (%): The expected long-term annual inflation rate.
- Risk Tolerance: Your investment risk tolerance profile.
- Investment Goal: The primary purpose of your investment portfolio.
- Current Salary ($): Your gross annual salary (optional, for contextual metrics).
Investment Return Performance: CAGR, ROI & Fees Explained
Understand how to calculate investment returns, total ROI, CAGR, and how expense ratios and capital gains taxes affect compounding wealth.
Read Full Guide →What is the difference between ROI and CAGR?
ROI (Return on Investment) measures the absolute percentage gain relative to the initial cost. CAGR (Compound Annual Growth Rate) measures the average annual rate at which an investment grows, accounting for the effect of compounding over time.
How does an expense ratio affect my returns?
The expense ratio is an annual fee charged by mutual funds or ETFs to cover management costs. Even a small difference (e.g., 0.05% vs. 1.25%) can compound into thousands of dollars in lost returns over long horizons.
Why are dividends taxed immediately in this model?
In taxable accounts, dividends distributed by funds or stocks are generally subject to dividend tax in the year they are paid, even if they are immediately reinvested. This model applies tax to dividend distributions and increases your reinvestment cost basis.
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