Investment Growth Calculator
Forecast multi-decade portfolio growth with monthly dollar additions, comparing nominal future value against inflation-adjusted real purchasing power.
Nominal vs Real Growth Formulas
Nominal Growth = FV(Nominal Rate, n, PMT, P) | Real Return Rate = [ (1 + Nominal) / (1 + Inflation) ] − 1 | Real Value = FV(Real Rate, n, PMT, P)- Nominal Return: Topline paper portfolio return (e.g. historical S&P 500 ~10%).
- Inflation Rate: Long-term average price inflation benchmark (typically 2.5% to 3.0%).
- Real Return: True growth in goods and services purchasing power (typically ~7.0% real).
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Investment markets fluctuate annually; calculations model steady compounding over multi-decade horizons.
Frequently Asked Questions
Why must long-term investors account for inflation?
Over 25 to 30 years, 2.5% inflation cuts the purchasing power of each dollar roughly in half. Looking only at nominal dollars creates a false sense of security about future retirement wealth.
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