Investment Growth

An annual growth model with a half-year contribution approximation — a fixed nominal return, no fees, no taxes, no inflation, and no contribution escalation.

Overview

The Investment Growth Calculator projects a single pool of money forward from a starting balance and a level monthly contribution at one fixed annual return. It is an annual model — it steps one year at a time, not one month at a time — with a specific approximation for when each year’s contributions start earning. All of its math runs server-side in RetireCalc.Engine.

Inputs

• Starting balance.
• Monthly contribution — level, never escalated.
• Expected annual return — nominal, one fixed rate for every year.
• Years to project.

The year-by-year formula

Each year, the monthly contribution is converted to an annual amount, and interest is computed on the starting balance plus half of that year’s contributions:

Worked example

Starting balance $0, $500/month ($6,000/year), 6% return:

• Year 1: interest = (0 + 6,000 ÷ 2) × 0.06 = $180; ending balance = 0 + 6,000 + 180 = $6,180.
• Year 2: interest = (6,180 + 3,000) × 0.06 = $550.80; ending balance = 6,180 + 6,000 + 550.80 = $12,730.80.

Outputs

• Final balance, total contributed (including the starting balance), and total investment growth (final balance − total contributed).
• Return on contributions = round( totalGrowth ÷ totalContributed × 100 ), and the contributions-vs-growth split of the final balance.
• A six-rate comparison grid (4%, 5%, 6%, 7%, 8%, 10%) re-running the same projection with only the return changed, and the full year-by-year table. The calendar-year column is the current year plus the row offset — a label, not an input.

What it does not model

• No inflation adjustment — every figure is in nominal future dollars. Use the Inflation Calculator to see the purchasing-power effect.
• No fees, expense ratios, or taxes — enter a return net of fees if you want to account for them.
• No contribution escalation — the monthly amount is level for the whole projection.
• A single fixed return — no market variability and no sequence-of-returns risk. For real historical returns use Portfolio Lab.