What Is An Investment Return Calculator

The main objective of any investment is to gain more money than you put into it. The profit or loss you incur out of it is your "return on investment”. An investment calculator can be utilized to estimate how much your acquisition could grow over a period! So, let’s say you want to know what the best investment plan for 3 years is. You can use a calculator to evaluate different plans and find out.

Managing your finances can be a difficult task especially when you have multiple sources of income. An investment calculator makes the monitoring of your investment effective and instinctive. With this, you will be able to create investment goals by entering a few figures. It helps in simplifying the decision-making process so you can plan your finances without any hassles, so let us learn more about an investment return calculator.

• Return rate
  This is something that matters the most to many investors. It comes across to be a plain percentage on the shell but it is the stiff numeral that is employed to analogize the magnificence of assorted kinds of financial investment.


• Starting amount
  Also called the principal amount, the starting amount can vary based on the kind of investment. While it can be small or reasonable when it comes to stocks and mutual funds, it can also be a large amount when it’s for purchasing a home or similar asset.


• End amount
  The amount that one desires at the end of the investment.


• Investment length
  This is the period for which an investment is made. Generally, the risk factor increases for a longer period of investment due to the unanticipated fate. On the contrary to this, the more time involved in an investment there will be more compounding of return which can lead to greater rewards. In most cases, proper analysis of past trends and market conditions can help determine investing for what duration can yield the highest returns.


• Additional contribution
  It is commonly referred to as an annuity payment. Although investment can be made without them. Moreover, the additional contribution during the life of the investment will lead to higher-end value.


• Liquidate
  The transformation of your assets or property into cash by trading them in the open market.


• Liquidity
  It refers to how quickly your acquisition can be liquidated or sold for cash.


• Net gain
  It refers to the amount of money that is earned on an investment (it does not include the amount that is paid for the investment).


• Net loss
  The amount that is lost on an investment is referred to as net loss. It means that the returns are lesser than the amount invested initially.


• Investment budget
  The capital that one can pay for and handle comfortably while investing.


• Investment Portfolio
  It includes all of the investments that one holds including stocks, bonds, mutual funds, retirement funds and many more.

A simple Google search will show you tons of virtual investment calculators that can help determine the returns you can get on various kinds of investments. The working for most of these is quite similar. You need to enter your initial investment, any additional contribution, the overall period and your expected return to get an idea of how much your investment might grow after a certain time. Moreover, for most acquisitions, you will want to opt for day-to-day compounding.

The investment calculator is very simple to use and easy to analyze. Here's a list of steps that will help you to use it efficiently:

• . Enter the starting amount
  This is the initial step wherein you are required to enter the amount you opened the investment with. For example, if you are starting the investment with Rs.80,000 then enter Rs.80,000 in the first box.


• . Indicate the time
  Here you will enter the amount of time that you intend to hold your investment. Generally, investments that mature for a longer period are more advantageous than the ones that are dealt with faster.


• Enter the rate of return on your investment
  This refers to the expected gain or loss on an investment over a period. It is calculated as a percentage. Here's a formula that can be used to calculate the rate of return:
  
  Rate of return= [Current value of the investment-Initial value of investment] x 100
  
  It is important to note that the rate of return may fluctuate over time due to unpredictable factors like investment security, federal interest rate and stock market changes.


• Fill in the Contribution Amount
  While contributing to the investment budget regularly, you will have to enter how much you commonly invest and how frequently you do so!

Investing might seem to be a game of numbers but frankly speaking, it can be a great task to keep up with it after a certain period. This is when the investment calculator comes as your saviour. It gives you a rough idea of how your investment will perform in future and what returns can a person expect for the stakes that they have funded. Below are some of the major advantages that make investing something that everyone should do:

• To make long-term capital
  This is one of the most crucial reasons to go for investing. It gives you the security that is required to lead a happy and prosperous life. Let's say for example at a certain stage of your life you want to leave your regular job and start your own business. You will hesitate to go for a career switch if you don't have minimum reserves to skimp on right? However, it will be easy for you to go for it if you have a strong investment portfolio.


• To be financially stable after retirement
  Everybody's life comes to a point wherein they retire or like to retire and relish the time on their stints. But for this, attaining financial independence becomes very important. Going for pension plans can be a great start but investing in a big retirement portfolio can help you attain this in less time frame.


• Buying expensive commodities
  Buying a house or a car or travelling may all seem to be impossible for a person who does a daily job. So, to turn such dreams into reality you for sure need many sources of income. Here's when the returns that you get from the investment come in. By having this side income, you become more stable financially and can be pleased with occasional fling as well.


• Beat Inflation
  The continuous rise in the cost of living over the period is called inflation. It can affect one's financial well-being. One of the best methods to outpace inflation is to induce positive real returns over the longer term by investing. As it will not only deliver higher income returns but also offers the potential for capital growth.

By now you must have got the idea about the importance of investing. But might be wondering where to invest to gain maximum benefits. So the investment calculator can be of great help to you. You can use an investment calculator to get a rough idea of the returns that you will get from equities, shares, mutual funds, real estate, gold etc.

As the investment calculator helps you to determine the amount to invest plus where to invest it could be a great alternative to go with. You can choose the best among a lot of options that are available such as mutual funds, SIPs, security markets and insurance agencies.