How it works
The ending balance is the future value of the initial amount plus the future value of the contribution stream:
FV = P(1 + i)N + PMT × [ ((1 + i)N − 1) / i ]
- P = initial investment · PMT = contribution per period
- i = return per period (annual return ÷ periods) · N = total periods
Total return is the ending balance minus everything you put in.
Worked example
$10,000 to start, $500/month for 25 years at an 8% annual return:
- Ending balance ≈ $549,000
- You invest $160,000; the remaining ≈$389,000 is growth.