What is meant by investment?
Investment is generally stated to be the process or an action when investing money for the profit. On the other hand, investment also means that it is an asset which is purchased with just a thought (or even hope at times) that it will be able to generate some sort of investment. Thus, it will help to secure your future as well.
On this page, one will be able to find out the method to calculate the investment in a very simple manner. However, before you go ahead & calculate the investment, a few definitions regarding the investment calculator will come handy.
Terms related to investment calculator
The terms related to investment calculator as are follows – (1) investment goal, which is stated to be the goal for total value of the investment or investments that you make (2) accumulating years is said to be the number of years wherein you will save the amount (3) periodic contribution means that it is the amount which will be contributed by the investor over a period of time (4) initial investment means that one can dedicate a certain amount at the time you start your investment.
The other terms include – (5) contribution, make sure that the time you have started contributing or rather investing, you make it a regular investment & see to it that you do not miss out on any of the investment (6) one has to have an eye for the compound interest as well so that you are aware of the interest that is added to the investments.
How to use an investment calculator?
Using an investment calculator will be an easy task & it becomes necessary for all that they follow the steps mentioned below in order to make use of this investment calculator. Firstly, you will have to enter the amount which is termed as the investment goal or in other words is the amount which you wish to receive at the end of the stipulated time. In the next field, it is marked for the years to accumulate.
It means that it is the time as in how many years do you wish the amount to be continuously invested. To enter the amount, users can either directly type it or put the slider in use. Once the duration is entered, you will have to mention as to what will be the initial investment amount (this amount is just the start to the great beginnings of a bright future). Apart from this, the user can mention the rate of the return on investment & this can generally be seen in percentage.
The next field is about the contribution that is made on a regular basis. In this field, one has to write down the amount which you plan to invest regularly. After this you can select the contribution frequency from the drop down menu & this is followed by the compound interest. Finally when you are sure about the details entered, click on calculate.
Formulae related to investments
1.Payment amount to reach the investment goal formula is as follows –
2.Number of payments to reach the investment goal formula has been mentioned below –