Future value

Total you invested
Returns earned
Growth multiple

How it works

A systematic investment plan puts the same amount in at regular intervals. Each instalment compounds for however long it has left to run, so the money you invest in year one does far more work than the money you invest in year ten.

The split between what you contributed and what you earned is the figure worth watching. Over long horizons the returns portion overtakes the contributions portion entirely — but that crossover usually takes a decade or more.

FV = C × ((1 + r)ⁿ − 1) ÷ r × (1 + r)

  • C — the amount invested each month
  • r — the monthly rate of return (annual ÷ 12 ÷ 100)
  • n — the number of monthly instalments
  • FV — the future value, assuming each instalment goes in at the start of the month

Worked example

Investing 10,000 a month for 15 years at 12% a year

Inputs

Monthly investment10,000
Expected return12%
Term15 years

Results

Future value5,045,760
You invested1,800,000
Returns3,245,760

Returns are worth nearly twice the contributions here. At 10 years instead of 15 the same plan reaches only 2.3 million — the last five years produce more than the first ten.

Frequently asked questions

What return should I assume?

Use a rate you can defend over your whole horizon, not last year’s. Broad equity indices have historically returned somewhere in the high single digits to low teens over long periods, before tax and costs. Model a pessimistic case too.

Does this account for fund charges?

No. Subtract the expense ratio from your expected return before entering it — a 1% annual charge against a 12% return means entering 11%, which over 15 years is a substantial difference.

Are the instalments assumed at the start or end of the month?

At the start, which is how most automated plans are debited. It adds one extra month of growth to every instalment compared with end-of-month timing.

Is my data sent anywhere?

No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.

More in Savings & Investing