Investment Return Calculator NZ

This projects what an investment becomes when you leave it alone and keep adding to it. You give it a starting balance, what you put in each year, how long for and an assumed annual return, and it returns the final balance along with the split that actually matters: how much of the result is money you contributed, and how much is growth. That split is the honest measure of whether compounding is doing the work or you are. Over ten years at ordinary returns, most of the balance is still your own contributions. Over thirty, growth usually dominates, and seeing where the crossover sits is more instructive than the final number. The calculator also shows the result adjusted for inflation, in today's money, which is the figure that tells you what the balance will actually buy. A projection of $500,000 in thirty years sounds transformative and is worth considerably less than it sounds, because the same basket of groceries will cost far more. One caution that matters more than any input: a fixed annual return is a modelling convenience, not a description of how markets behave. Real returns arrive unevenly, and a poor decade early does more damage than the same decade late, which no smooth projection can show you.

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Starting amount

Added each year

Years invested

Annual return

Inflation

$52,831

projected balance before inflation

You contributed$34,000

Growth$18,831

Growth as a share35.6%

In today's money$43,340

Total return on contributions55.4%

A fixed annual return is a modelling convenience, not a forecast. Real returns arrive unevenly, and a poor run early costs more than the same run late. Before tax and fees.

How it works

The starting amount grows by compounding: the balance multiplied by one plus the rate, raised to the number of years. Annual contributions are treated as an ordinary annuity, added at the end of each year, using the standard future value formula: the contribution multiplied by the quantity one plus the rate raised to the years, minus one, divided by the rate. The two are added. Growth is the final balance less everything you put in. The inflation-adjusted figure divides the final balance by one plus the inflation rate raised to the years, which converts it into what it would buy today.

Worked example

Take the defaults: $10,000 to start, $2,400 a year for 10 years at 7 percent. The starting amount grows to $10,000 x 1.07 to the power 10, which is about $19,672. The contributions grow to $2,400 x the annuity factor of about 13.816, which is roughly $33,159. Together that is about $52,831. You put in $10,000 plus 10 lots of $2,400, which is $34,000, so growth is about $18,831, or 35.6 percent of the balance. Adjusted for 2 percent inflation over 10 years, the $52,831 is worth about $43,340 in today's money.

Related calculators

Compound Interest: the growth mechanism on its own.
KiwiSaver: the same maths inside the scheme.
Savings: a shorter horizon at a deposit rate.
Inflation: what a sum is worth over time.

Data sources: future value uses the standard compound interest and ordinary annuity formulas. Returns and inflation are assumptions you choose, not forecasts. Figures are before tax and fees; New Zealand investors should also consider PIE tax rates and fund fees.

Frequently asked questions

How do I calculate investment return with regular contributions?

Compound the starting amount forward, then add the future value of the contributions as an annuity, and add the two together. The contributions cannot simply be multiplied by the years, because each one has a different length of time left to grow.

How much of a balance is growth rather than contributions?

Less than most people expect over short periods. Over ten years at ordinary returns, contributions usually still make up most of the balance. Growth tends to overtake contributions somewhere in the second or third decade, which is the argument for starting early rather than contributing more.

Why does the inflation-adjusted figure matter?

Because it is what the money will actually buy. A projected balance in thirty years is denominated in future dollars, which purchase less than today's. Dividing by inflation over the period converts it into today's money, which is the only figure you can sensibly compare to what you spend now.