If your mutual fund contains only bonds, it offers a fixed rate of return. If the fund also contains stocks, your calculations will be less accurate because you can never predict the fund's growth with certainty. Yet if you assume a constant return rate, you can calculate the fund's growth using a simple formula. Its growth will depend on its return rate, the size of your monthly contributions and the length of time for which you invest in the fund.
Enter the fund's monthly return rate into a physical or online financial calculator (many are available for free online; see Resources for link to one) and then press the "i" key. For example, if you estimate that the fund will see returns of 1 percent each month, type "1."
Enter the mutual fund's current balance, and then press the "PV" key. If you are calculating your predicted growth without having yet contributed anything to the fund, type "0."
Enter the size of your monthly contribution and then press "PMT." For example, if you plan to add $500 to the fund every month, type "500."
Multiply the number of years for which you will hold the mutual fund by 12. For example, to calculate your growth over the course of 10 years, multiply 10 by 12 to get 120.
Type this figure into the calculator and then press "n."
Press "Compute," and then press "FV" to find the fund's future value. With this example, the calculation shows that the fund will grow to an estimated $115,019 in 10 years.
Items you will need
- Financial calculator
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