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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. Click the "View Report" button for a detailed look at the results.

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

    You can also get SUN's Java™ Plug-in here: Get the Java™ Plug-in!

    For more information about this Plug-in please visit: SUN's Java™ Plug-in

    For more information about these financial calculators please visit: Financial Calculators from KJE Computer Solutions, LLC

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. For example, from December 2000 to December 2010, the annual compounded rate of return for the S&P 500 was 0.899%, including reinvestment of dividends. From January 1970 to December 2010, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.05% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

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. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). The CPI for 2010 was 2.4%, as reported by the Minneapolis Federal Reserve. From 1925 through 2010 the CPI has long-term average of 3.1% annually. Over the last 30 years highest CPI recorded was 13.5% in 1980.

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.

   
 
 

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