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Investment Contribution Needed Calculator

Calculation Target:

Input the before tax annual return

years
Calculated Results
Contribution Needed478
Total Interest11,302
Total Contribution28,698
End Principal48,698
Related
Interest Portfolio Performance Return CD

Balance and Interest

Year Begin Principal Begin Balance Interest End Principal End Balance
1 20,000 20,000 1,356 25,740 27,096
Month120,00020,0009720,47820,576
Month220,47820,57610020,95721,154
Month320,95721,15410321,43521,735
Month421,43521,73510621,91322,319
Month521,91322,31910922,39222,906
Month622,39222,90611122,87023,496
Month722,87023,49611423,34824,089
Month823,34824,08911723,82624,684
Month923,82624,68412024,30525,283
Month1024,30525,28312324,78325,884
Month1124,78325,88412625,26126,489
Month1225,26126,48912925,74027,096
2 25,740 27,096 1,782 31,479 34,617
Month1325,74027,09613226,21827,706
Month1426,21827,70613526,69628,319
Month1526,69628,31913827,17528,935
Month1627,17528,93514127,65329,555
Month1727,65329,55514428,13130,177
Month1828,13130,17714728,61030,802
Month1928,61030,80215029,08831,430
Month2029,08831,43015329,56632,061
Month2129,56632,06115630,04432,696
Month2230,04432,69615930,52333,333
Month2330,52333,33316231,00133,974
Month2431,00133,97416531,47934,617
3 31,479 34,617 2,233 37,219 42,590
Month2531,47934,61716931,95835,264
Month2631,95835,26417232,43635,914
Month2732,43635,91417532,91436,567
Month2832,91436,56717833,39337,224
Month2933,39337,22418133,87137,883
Month3033,87137,88318434,34938,546
Month3134,34938,54618834,82739,212
Month3234,82739,21219135,30639,881
Month3335,30639,88119435,78440,553
Month3435,78440,55319736,26241,229
Month3536,26241,22920136,74141,908
Month3636,74141,90820437,21942,590
4 37,219 42,590 2,712 42,959 51,042
Month3737,21942,59020737,69743,276
Month3837,69743,27621138,17643,965
Month3938,17643,96521438,65444,657
Month4038,65444,65721739,13245,353
Month4139,13245,35322139,61146,052
Month4239,61146,05222440,08946,754
Month4340,08946,75422840,56747,460
Month4440,56747,46023141,04548,170
Month4541,04548,17023441,52448,882
Month4641,52448,88223842,00249,599
Month4742,00249,59924142,48050,318
Month4842,48050,31824542,95951,042
5 42,959 51,042 3,219 48,698 60,000
Month4942,95951,04224843,43751,768
Month5043,43751,76825243,91552,499
Month5143,91552,49925644,39453,233
Month5244,39453,23325944,87253,970
Month5344,87253,97026345,35054,711
Month5445,35054,71126645,82955,456
Month5545,82955,45627046,30756,204
Month5646,30756,20427446,78556,956
Month5746,78556,95627747,26357,711
Month5847,26357,71128147,74258,470
Month5947,74258,47028548,22059,233
Month6048,22059,23328848,69860,000

How to calculate Investment Return

The calculator will calculate the annualized IRR return that is considered as a good index to measure an invesment return. The IRR return use the cash flow of the whole investment life and discount it based on the time factor such that the net present value of the cash flow is equal to the initial investment based on this formula: \[ Initial = \sum_{n=1}^{n=m} \frac{F_n}{(1+IRR)^n} \] Where \( F_n \) is the investment Cash flow for year n (that is the Interest Earned - Contribution), m is the number of years of the investment.

How to invest

To manage your personal finance, investment is one of the most important tool for you to reach your goal. A healthly financial life almost always come along with a good investment. Here are a list of good tips of investment:
  • Set up a clear and realistic goal. Then start to invest for the goal as soon as possible. The investment process will need time to build wealth, by starting early will give you more time to grow your wealth. You can try to adjust the Investment Length to see how it will impact your end balance. Or you can try to calculate how long it will take to reach your goal using the calculator.
  • Seeking a better return. The difference of the investment return will make a big difference to the end balance given a long investment term. For example, put your money into a bank saving account might only give you a 2% return, but invest a REIT fund might give you a 8% or even higher return. You can try to use the calculator to change the return for a fixed time period to see how it will impact your end wealth.
  • Consider of investment risk and try to manage the risk. Investment will have a risk. Especially if you want to higher return. Normally, the higher return coming along with the higher risk. Therefore, to manage the risk is the most important point in the investment process. If one investment has 20% return in one year, but -2% in the next year, but the other investment has a stable return of 9% every year, you should select the later one because it is considered as lower risk than the first case. To separate the in flow of your investment by periodic contribution is a good way to manage the market timing risk.
  • Diversify your investment portfolio is another way to manage risk. If you put all you asset into one bucket and if that bucket has a problem, your whole portfolio is going down. For example, if you put all your asset in to stock market, and when the market clash, you will see you whole portfolio going down. By diversify, you can have one bucket offset the other if one is not performing well. Consider of the total wealth in the world is fixed, so when one section of investment world valued down, there will be most likely another section going up.