When an investment has a Current Value, GoalsMapper treats that amount as the value of the investment today.
To project that value to the end of the year, GoalsMapper applies the annual investment return proportionately over the remaining part of the year.
The calculation is:
Projected value = Current Value × (1 + annual return)^(months remaining ÷ 12)
Example
Assume:
- Current Value: $100,000
- Annual return: 6%
- Months remaining in the year: 4
GoalsMapper calculates:
$100,000 × (1.06)^(4/12)
This gives a projected value of approximately $101,961 before taking into account any additional contributions, fees, dividends, withdrawals or other investment cash flows.
Why doesn't GoalsMapper divide the annual return by 12?
A common approach is to calculate a monthly rate by simply dividing the annual return by 12.
For example:
6% ÷ 12 = 0.5% per month
and then apply that rate over the remaining months.
However, this does not preserve the annual return assumption exactly.
GoalsMapper treats the investment return entered as an annual effective return. It therefore converts that annual return proportionately to the remaining fraction of the year using compounding.
In other words, if the annual return assumption is 6%, the calculation is designed so that a full 12-month period produces a 6% return.
This provides a consistent approach whether the Current Value is being projected for 1 month, 4 months or a full year.
What else affects the year-end projected value?
The Current Value projection is only one component of the investment calculation.
The final projected investment value may also take into account:
- Contributions for the remaining months of the year
- Sales charges
- Management fees
- Dividends or investment income
- Withdrawals or payouts
- Other investment cash flows
As a result, the year-end investment value may not equal the Current Value growth calculation alone.