Go beyond basic compound interest. This calculator adds inflation adjustment, tax estimates, and three return scenarios so you see realistic projections for your portfolio.
Why Realistic Investment Projections Matter
Most investment calculators show a single growth line — a smooth, optimistic curve. Real markets don't work that way. Returns fluctuate, inflation erodes purchasing power, and taxes take a portion of your gains. This calculator accounts for all three.
The three-scenario model — pessimistic, expected, and optimistic — shows you the range of possible outcomes based on market variability.
Quick Answer
Investing $10,000 plus $500 per month for 20 years at a 7% expected return grows to $300,851 before inflation, of which $170,851 is investment gain. Adjusted for 2.5% annual inflation that balance is worth $183,600 in today's money, and after 22% tax on gains you keep $133,264 of the growth. A 3-point lower return would end at $205,613 and a 3-point higher return at $452,965.
Worked Example
$10,000 plus $500 per month over 20 years — three return scenarios (2.5% inflation, 22% tax on gains)
Scenario
Annual return
Nominal balance
Gains
Real value (today's money)
After-tax gains
Pessimistic
4%
$205,613
$75,613
$125,480
$58,978
Expected
7%
$300,851
$170,851
$183,600
$133,264
Optimistic
10%
$452,965
$322,965
$276,431
$251,913
The Formula
A = P(1 + r/12)^(12t) + PMT × [((1 + r/12)^(12t) − 1) ÷ (r/12)], real value = A ÷ (1 + i)^t
Monthly compounding is used for contributions, then the nominal balance is discounted by the inflation rate i to express it in today's purchasing power. Tax is applied to gains only.
Key Terms Defined
Real (inflation-adjusted) value
The nominal balance divided by (1 + inflation)^years, expressing future money in today's purchasing power.
After-tax gains
Investment gains multiplied by (1 − tax rate). Only the growth is taxed, not the contributions.
Nominal rate (APR)
The stated annual rate before compounding is applied. A 7% nominal rate compounded monthly charges or pays 7%/12 = 0.5833% each month.
Effective annual rate (APY)
The rate you actually earn or pay once compounding is included: EAR = (1 + r/n)^n − 1. A nominal 7% compounded monthly equals an effective 7.23% per year; compounded daily it equals 7.25%.
Method & Limitations
All three scenarios come from the same investment engine as the calculator above: the expected return, that return minus 3 points, and that return plus 3 points.
Contributions are compounded monthly and added at the end of each month.
Balances are rounded to the nearest cent internally and displayed to the nearest dollar.
The return rate is assumed constant for the whole period; real markets and savings rates vary year to year.
Fees, account charges and currency effects are excluded unless a field for them exists in the calculator.
Results are estimates for planning purposes, not financial advice.
Scenarios are a simple ±3 percentage-point band, not a simulation of market volatility.
Tax treatment is a flat estimate on gains and ignores account type, allowances and local rules.