| 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 assume that you
make your contribution 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. Historically the major stock indexes have averaged
11% to 12% per year. If you plan on withdrawing your money within
five years, you may wish to choose a more conservative rate of return.
An ordinary savings account earns 2% to 5%. |
| Compounding |
This is the frequency that your investment's interest
or income is added to your account. The more frequently this occurs,
the sooner your accumulated interest income will generate additional
interest. 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. |
