Consistent
investments over a number of years can
be an effective strategy to accumulate
wealth. Even small additions to your savings
add up over time. This calculator demonstrates
how to put this savings strategy to work
for you! |
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Definitions |
- Starting amount
- The starting balance or current amount
you have invested or saved.
- Additional contributions
- The
amount
that
you
plan
on
adding
to
your
savings
or
investment
each
period.
The
investment
period
options
include
monthly,
quarterly
and
annually.
This
calculator
assumes
that
you
make
your
contributions
at
the
beginning
of
each
period.
- Years
- The
total
number
of
years
you
are
planning
to
save
or
invest.
- Rate of return
- The
annual
rate
of
return
for
this
investment
or
savings
account.
The
actual
rate
of
return
is
largely
dependant
on
the
type
of
investments
you
select.
For
example,
from
January
1970
to
February
2003,
the
average
compounded
rate
of
return
for
the
S&P
500,
including
reinvestment
of
dividends,
was
approximately
11%.
Savings
accounts
at
a
bank
pay
as
little
as
1%
or
less.� It
is
important
to
remember
that
future
rates
of
return
can't
be�predicted�with
certainty
and
that
investments
that
pay
higher
rates
of
return
are
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.
- Compounding
- Earnings
on
an
investment's
earnings,
plus
previous
interest.
This
calculator
allows
you
to
choose
the
frequency
that
your
investment's
interest
or
income
is
added
to
your
account.
The
more
frequently
this
occurs,
the
sooner
your
accumulated
earnings
will
generate
additional
earnings.
For
stock
and
mutual
fund
investments,
you
should
choose
'Annual'.
For
savings
accounts
and
CDs,
all
of
the
options
are
valid,
although
you
will
need
to
check
with
your
financial
institution
to
find
out
how
often
interest
is
being
compounded
on
your
particular
investment.
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| Information and interactive
calculators are made available to you as
self-help tools for your independent use
and are not intended to provide investment
advice. We can not and do not guarantee their
applicability or accuracy in regards to your
individual circumstances. All examples are
hypothetical and are for illustrative purposes.
We encourage you to seek personalized advice
from qualified professionals regarding all
personal finance issues. |