Investment Return Calculator

Compound growth calculates returns on both the original principal and accumulated gains. The formula for a lump sum is: Future Value = Present Value x (1 + r)^n, where r is the annual return rate and n is the number of years. For regular monthly contributions, each payment compounds for a different duration, calculated using the future value of an annuity formula: FV = PMT x [((1 + r/12)^(12n) - 1) / (r/12)].

Nominal returns represent the headline growth rate before accounting for inflation. Real returns strip out inflation to show actual purchasing power gain. If your investment grows 7% nominally and inflation is 3%, your real return is approximately 3.88% (calculated as (1.07/1.03) - 1, not simply 7% - 3%). Over long periods this distinction is crucial: £100,000 growing at 7% nominal for 30 years reaches £761,226, but at 3% inflation its real purchasing power is only £352,365.

The calculator separates returns into components: original contributions, investment growth, and the effect of charges. Platform fees and fund charges compound negatively just as returns compound positively. A 1% annual charge on a £100,000 portfolio growing at 6% over 30 years costs approximately £132,000 in foregone growth — nearly as much as the original investment. The tool shows gross return, charges deducted, and net return side by side.