Calculators

Credit/Savings

Investment returns

Meeting your long-term investment goal is dependent on a number of factors. This not only includes your investment capital and rate of return, but inflation, taxes and your time horizon. This calculator helps you sort through these factors and determine your bottom line.

Definitions

Years

The number of years you wish to analyze. This can be any number from one to one hundred.

Rate of return

This is the annually compounded rate of return you expect from your investments before taxes. The actual rate of return is largely dependent on the type of investments you select. From January 1970 to December 2008, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 9.7% (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, from June 1982 through June 1983. The lowest 12-month return was -39%, which happened twice, once from September 1973 to September 1974 and again from November 2007 to November 2008. Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.

Compound interest

Interest on an investment's interest, plus previous interest. The more frequently this occurs, the sooner your accumulated interest will generate additional interest. You should check with your financial institution to find out how often interest is being compounded on your particular investment.

Initial investment

Total you currently have invested that should be included in this analysis.

Inflation rate

What you expect for the average long-term inflation rate.

Annual investments

The amount you will contribute each year to your investments. If you check the box to adjust this amount for inflation, your annual investment will increase each year by the inflation rate.

Tax rate

The percentage of your investment return you will pay in taxes. Your taxes are assumed to be payable annually, at the end of the year.

Compounded interest return

Total after-tax return if your investment profit is compounded annually.

Simple interest return

Total after-tax return if your investment profit is simple interest with no compounding.

Total invested capital

Total you have invested. This includes your initial investment and all periodic investments.

Investment final total

Your investments total ending value. If you have checked the box to show values after inflation, this amount is the total value of your investment in today's dollars. If this box is unchecked, it will show the actual value of the investment.