Fidelity Investing Calculator

Investment Growth Formula:

\[ A = P \times (1 + r/n)^{n \times t} + \Sigma(Contributions \times (1 + r/n)^{n \times (t - \text{Contribution time})}) \]

Initial Investment (P):

Annual Interest Rate (r):

Investment Period (t):

years

Compounding Frequency (n):

Regular Contribution:

Contribution Frequency:

Future Investment Value (A):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Fidelity Investing Formula?

The Fidelity Investing Calculator uses compound interest formula to estimate future value of investments with regular contributions. It accounts for principal amount, interest rate, compounding frequency, and additional contributions.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + r/n)^{n \times t} + \Sigma(Contributions \times (1 + r/n)^{n \times (t - \text{Contribution time})}) \]

Where:

\( A \) — Future value of investment
\( P \) — Principal investment amount
\( r \) — Annual interest rate (decimal)
\( n \) — Number of compounding periods per year
\( t \) — Time the money is invested for (years)
\( Contributions \) — Regular additional investments

Explanation: The formula calculates how money grows over time with compound interest and additional contributions.

3. Importance of Compound Growth

Details: Compound growth is the process where investment earnings are reinvested to generate additional earnings. Over time, this leads to exponential growth of your investments.

4. Using the Calculator

Tips: Enter initial investment amount, expected annual return, investment period, and compounding frequency. For more accurate results, include regular contribution amounts and their frequency.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator?
A: It provides a good estimate but actual returns may vary due to market fluctuations and other factors.

Q2: What's the benefit of more frequent compounding?
A: More frequent compounding (e.g., monthly vs annually) results in slightly higher returns due to interest being calculated on interest more often.

Q3: How important are regular contributions?
A: Regular contributions can significantly increase your final balance through dollar-cost averaging and additional compounding.

Q4: Should I include taxes in my calculations?
A: For taxable accounts, you may want to reduce the expected return rate to account for taxes. Tax-advantaged accounts like IRAs don't require this adjustment.

Q5: What's a realistic expected return rate?
A: Historically, stock market returns average about 7-10% annually, but this varies by asset class and time period.