FINANCIAL PLANNING

COMPOUND INTEREST CALCULATOR

USEFULNESS OF THIS CALCULATOR:-

To plan for your children education funds.

To plan for your retirement funds.

To plan for your purchase of houses, cars, travel etc.

To plan for your unit trust/insurance investment.

"Compound interest is the eighth wonder of the world"

.....Albert Einstein

HOW TO USE THIS CALCULATOR ?

For example, Mr Alex wanted to plan his children education fund of $23,000 for his son to study in local university in five years time, he prepared to come out with $2,000 as lump sum investment, what will be his monthly investment be assuming he decided to invest in a financial instrument which gives annual rate of return of 12%.

EXAMPLE

Principal: $2,000

Interest rate: 12
Years: 5

Months: 0

Pay Period:

choose monthly
Final Balance:

$ 23,000
Interest type: monthly
Always update: choose payment

ANSWER: $235

WHAT IF ?

Similarly, if Mr Alex has decided to increase his lump sum investment to $3,500, his monthly investment will reduce to $202 for him to achieve his target of $23,000 in his education funding.

WHAT YOU SHOULD KNOW ABOUT FINANCIAL PLANNING?

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COMPOUND INTEREST CALCULATOR

This applet is designed to calculate payoffs from fixed interest investment accounts. Simply fill in all of the fields except the one you want to calculate and the result will appear. Here is what the fields mean:

Principal: The initial investment placed at the start of the term.
Interest Rate: The fixed interest paid on the investment.
Years: The number of years the investment will accrue interest.
Months: The additional number of months to accrue interest.
Payment: Amount of money to be paid to the investment account.
Pay period: How often the payment will be made to the account.
Final Balance: How much money you end up with.
Interest Type: How often the interest will be paid to the account.
Always Update: What field should be recalculated using the information in the other fields.

ABOUT FINANCIAL PLANNING

What is financial planning?

Benefits of financial planning.

What is a financial planner?

Financial planning process

ASSET ALLOCATION

INSURANCE PLANNING

RETIREMENT PLANNING

ESTATE PLANNING

Estate Planning Basics- NAFEP
Estate Planning Articles

INVESTMENT PLANNING

The Rule of 72

To figure out how many years it would take for your money to double at a certain rate of return, simply divide 72 by the rate of return, ie.,

Assuming a rate of return of 6%, your investment will double in 12 years, (72/6) or , in other words, $10,000 invested at 6% p.a. rate-of-return will grow to $20,000 after 12 years

The Rule of 72

To figure at what rate of return you need to gain in order for your investments to double in a certain number of years, divide 72 by the number of years, ie.,

If you want your money to double in 6 years, your investments will need to earn 12% p.a. rate-of-return (72/6) or, in other words $10,000 invested will grow to $20,000 after 6 years at the rate-of-return of 12% p.a.

Asset Allocation

"I'm not a good shot, but I shoot often"

....Theodore Roosevelt

Determinants of Portfolio Performance:-

Asset Allocation:91.5%

Market Timing: 1.8%

Security Selection: 4.6%

Other factors: 2.1%

"...Gary P. Brinson, Brian D. Singer and Gilbert L. Beebower"

Financial Analysts Journal, May-June 1991

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Disclaimer

The above calculator and other contents herein are provided for information only. The author does not warrant its accuracy and correctness and expressly disclaim all liabilities, losses and damages arising out of the use of this information.