There is no way of escaping the numbers involved in investments, especially big investments. These numbers need to be calculated in different ways to find out one thing or the other about the investment; before, during, or after an investment. It is a good thing to use an investment calculator to calculate specific parameters of an investment plan. This will give the investor a good idea of what will probably become of the investment in future.
TYPES OF INVESTMENT CALCULATORS
There are different types of investment calculator meant for different purposes. They include
Future value calculator
Present value calculator
Dividend investment calculator
These different types of calculator are useful base on the time they are used, as their names imply.
- FUTURE VALUE CALCULATOR:
The future value calculator calculates the value of an asset or cash at a future that as compared to its value today. As is usually the case with the financial market, the value of a security is not the same at all time; it varies with factors such as inflation and deflation. Putting inflation and deflation into consideration, as well as the effort put into growing the investment over a period of time, the value of the investment will either increase or decrease.
- PRESENT VALUE CALCULATOR:
The present value calculator is used to calculate the current value of an investment before maturity. A lot of times, investment tend to take a course different from the one that was mapped out for it; and sometimes, the plan for an investment may not be good enough for it. In order to achieve the aim of an investment, it is best to use the present value calculator every once in a while to find out if the investment will eventually get to its goal or not. Outcome of the present value calculator can inform a trader on how best to handle an investment to reach its maximum goal and avoid losses.
- DIVIDEND INVESTMENT CALCULATOR:
The dividend calculator helps a trader to understand and apply act of saving, reinvestment, and time to create wealth. An investor with a high rate of saving is likely to gain more that the one with a high rate of return. Saving, and doing so on time to, can grow over time and create great dividend for the investor. Reinvesting the dividend produces a better outcome in a flat or depreciating market condition.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.