Investment Calculator — future value in today's money

How it works

Three steps. Grow: the lump compounds at the nominal rate while annual contributions accumulate by the savings-annuity formula — the future-value arithmetic. Deflate: divide by (1 + inflation)^years, converting the future balance into today's purchasing power; growing the real answer back at inflation reproduces the nominal one exactly, which the tests assert. Restate the rate: (1+n)/(1+i) − 1, the Fisher ratio — 7% against 3% inflation is a real 3.88%, not the naive 4%. The labeled table puts the two currencies side by side with the gain each shows over the money invested; the gap between the rows is inflation's bite, and on long horizons it is the difference between a number that flatters and one that feeds you.

Worked example

The nominal engine rests on the published pair: $3,000 at 7% for four years grows to $3,932.39 (LibreTexts), which this page reproduces exactly when contributions and inflation are zeroed. On the default inputs — $10,000 plus $500 a year at 7% nominal for 20 years, against a 3% inflation assumption — this calculator grows the balance to about $59,200 in future dollars and deflates it to roughly $32,800 of today's purchasing power at a real rate of 3.88%: its own composition of the published growth and the deflation mirror.

Frequently asked questions

Why show the result in two kinds of dollars?

Because a 20-year projection in future dollars quietly overstates what the money will buy. The nominal figure is what the statement will say; the real figure is what it will purchase in today's terms — and planning against the second avoids the most common projection illusion.

What is the real rate of return?

The nominal return with inflation stripped out, computed exactly: (1 + nominal) ÷ (1 + inflation) − 1. It runs slightly below the simple subtraction — 7% minus 3% is not quite 4% — and over decades that sliver compounds into a visible gap, which is why the page uses the exact ratio.

What inflation rate should I assume?

The page won't choose — future inflation is unknown, so the input is an assumption with presets at zero and at a hot 6%. Run the range you consider plausible and read the spread of real values as the planning band.

How is this different from the future-value calculator?

Same nominal engine, different question: future-value reports the balance in future dollars and leaves inflation to a caveat; this page makes the deflation the headline, with the real value as the primary output. Use future-value for the statement figure, this page for what it buys.

Do contributions here differ from the savings calculator?

Only in rhythm: this page contributes annually to keep the real-terms story clean, while savings models monthly or quarterly deposit streams in detail. For fine-grained deposit schedules, feed savings; for the inflation-adjusted big picture, this page.

Can the real value fall while the nominal grows?

Yes — whenever inflation outruns the return. Set the inflation assumption above the nominal rate and the real row shrinks year by year even as the future-dollar figure climbs: growth in name, erosion in fact, which is the scenario the two-row table exists to expose.

How accurate is this, and what does it exclude?

Exact for constant rates, annual contributions, and the entered assumptions. It excludes volatility and sequence risk, taxes and fees, contribution growth over time, and the difference between your personal inflation basket and any single assumed rate. Both rates are assumptions; the spread across plausible values is the honest output.