Investment Calculator
Field Descriptions for the Investment Calculator: CAGR (Compounded Annual Growth Rate) This represents the rate at which your money will grow or has grown. You may solve for it by filling out all other fields or you may enter a rate that you think is appropriate. Typically, for long term (about 20+ years) investment of stocks, 8% is an appropriate and conservative estimate. For medium term (about 8-19 years), I would put in 6% because you should put a large amount of the money into bond funds. For short term (about 7 or less years), I would use 4% as you would probably not invest in any stocks, but mostly bonds and a money market account. All of these approximate growth rates factor in a basic inflation rate. You may want to solve this as a CAGR calculator if you are looking to figure out how well a certain investment you made in the past did. For example, let's say you invested in Apple 10 years ago in Aug 1st, 2001 (you sure were smart!). The start price was $9.275 per share. The price on Aug 1st 2011 was $366.05. There was a split in 2005 and that was accounted for. Enter 9.275 into Starting Value, 366.05 into Ending Value, and 10 into Number of Years into the CAGR calculator. Leave CAGR blank. Then hit calculate. Your compounded annual growth rate would be a whopping 44.42%. (That is huge. You should never expect to get such great long term returns.) Enter how much money you are starting with or started with if you know this value. Like the other fields, you may leave this field blank to solve for it. You may want to solve for the start value if you know how long you will have an investment, you know the growth rate, and you know what final value you will need. Then the calculator will tell you how much you need to invest at the beginning. For example, let's say you have an investment target of $20,000 in 20 years and you think you can expect it to grow at a 7% rate over that period. How much do you need to invest today to hit your target? Put the 3 numbers into the calculator. Hit calculate and you get...$5168.38. That would be how much you need to invest to hit your target. Enter the amount of money you expect to have at the end or how how much you ended with. Again, like the other fields, this field can be left blank to solve for it. It can tell you how much money you expect to have at the end of a certain time period given a specific growth rate and start value. For example, let's say you have $25,000 to invest for the next 10 years and you think you can expect it to grow at a 6% rate over that period. How much money will you have at the end of that 10 years? Put the 3 numbers into the investment calculator. Leave Ending Value blank. Hit calculate and you get...$17,908.48. That would be how much you will have at the end of 10 years. Enter the number of years from the start value to the end value. And again, this field can be left blank to solve for it. You may want to leave this field blank to see how long it will take to grow your investment from one value to another assuming a specific growth rate. For example, let's say you have $10,000 to invest and you want to turn that into $25,000. You think you can get a 8% growth rate on your money. How long will it take for you to hit your target? Plug the three numbers into the investment calculator. Leave Number of Years blank. Hit calculate...11.91 years is your answer. Retirement Calculator If you're looking to calculate different numbers when adding an annual amount to your investments every year, then go to the retirement calculator (coming soon!). It gives all the same fields as this calculator plus the annual investment addition field. For example, if you want to invest $5,000 per year on top of your starting value, this would be the calculator for you. Go ahead and bookmark this page and come back to it when you want to make a calculation. I constantly find myself wanting to use an investment calculator and in the past I have used a clunky excel spreadsheet to make calculations. This is so much easier and quicker. It has made my life just a little bit easier. Hey, every little bit counts. return from Investment Calculator to Stock Market For Beginners |