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Investment Start Balance Calculator

Calculation Target:

Input a negative value for withdrawing.



Input the before tax annual return

years
Calculated Results
Start Balance18,874
Total Interest11,126
Total Contribution30,000
End Principal48,874
Related
Interest Portfolio Performance Return CD

Balance and Interest

Year Begin Principal Begin Balance Interest End Principal End Balance
1 18,874 18,874 1,296 24,874 26,169
Month118,87418,8749219,37419,465
Month219,37419,4659519,87420,060
Month319,87420,0609820,37420,658
Month420,37420,65810120,87421,258
Month520,87421,25810321,37421,862
Month621,37421,86210621,87422,468
Month721,87422,46810922,37423,078
Month822,37423,07811222,87423,690
Month922,87423,69011523,37424,305
Month1023,37424,30511823,87424,924
Month1123,87424,92412124,37425,545
Month1224,37425,54512424,87426,169
2 24,874 26,169 1,733 30,874 33,903
Month1324,87426,16912725,37426,797
Month1425,37426,79713025,87427,427
Month1525,87427,42713426,37428,061
Month1626,37428,06113726,87428,697
Month1726,87428,69714027,37429,337
Month1827,37429,33714327,87429,980
Month1927,87429,98014628,37430,626
Month2028,37430,62614928,87431,275
Month2128,87431,27515229,37431,927
Month2229,37431,92715529,87432,582
Month2329,87432,58215930,37433,241
Month2430,37433,24116230,87433,903
3 30,874 33,903 2,197 36,874 42,100
Month2530,87433,90316531,37434,568
Month2631,37434,56816831,87435,236
Month2731,87435,23617232,37435,907
Month2832,37435,90717532,87436,582
Month2932,87436,58217833,37437,260
Month3033,37437,26018133,87437,942
Month3133,87437,94218534,37438,626
Month3234,37438,62618834,87439,314
Month3334,87439,31419135,37440,006
Month3435,37440,00619535,87440,700
Month3535,87440,70019836,37441,399
Month3636,37441,39920236,87442,100
4 36,874 42,100 2,689 42,874 50,789
Month3736,87442,10020537,37442,805
Month3837,37442,80520837,87443,513
Month3937,87443,51321238,37444,225
Month4038,37444,22521538,87444,940
Month4138,87444,94021939,37445,659
Month4239,37445,65922239,87446,381
Month4339,87446,38122640,37447,107
Month4440,37447,10722940,87447,837
Month4540,87447,83723341,37448,569
Month4641,37448,56923641,87449,306
Month4741,87449,30624042,37450,046
Month4842,37450,04624442,87450,789
5 42,874 50,789 3,211 48,874 60,000
Month4942,87450,78924743,37451,537
Month5043,37451,53725143,87452,287
Month5143,87452,28725544,37453,042
Month5244,37453,04225844,87453,800
Month5344,87453,80026245,37454,562
Month5445,37454,56226645,87455,328
Month5545,87455,32826946,37456,097
Month5646,37456,09727346,87456,870
Month5746,87456,87027747,37457,647
Month5847,37457,64728147,87458,427
Month5947,87458,42728448,37459,212
Month6048,37459,21228848,87460,000

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.