Investment Calculator

Investing money wisely is a crucial aspect of financial planning. Our Investment Calculator helps you understand the growth of your investments over time, taking into account factors like the initial investment, interest rate, time period, and compounding frequency. Below, we'll explore different investment types, formulas, and examples.

Simple Interest Investment

Simple interest is calculated on the initial principal amount throughout the entire life of the investment.

Formula: A = P + (P * r * t)

Example: If you invest $1,000 at a 5% annual interest rate for 2 years, A = $1,000 + ($1,000 * 0.05 * 2) = $1,100.

Compound Interest Investment

Compound interest is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Formula: A = P * (1 + r/n)^(nt)

Example: If you invest $1,000 at a 5% annual interest rate compounded quarterly for 2 years, A = $1,000 * (1 + 0.05/4)^(4*2) = $1,104.49.

Continuous Compounding Investment

Continuous compounding is the mathematical limit that compound interest reaches if it's calculated and compounded infinitely.

Formula: A = P * e^(rt)

Example: If you invest $1,000 at a 5% annual interest rate with continuous compounding for 2 years, A = $1,000 * e^(0.05*2) = $1,105.17.

Dividend Reinvestment

Dividend reinvestment is a strategy where the dividends received are reinvested to purchase additional shares or fractional shares.

Formula: A = P * (1 + (r + d)/n)^(nt)

Example: If you invest $1,000 in a dividend-paying stock with a 5% annual interest rate and 2% dividend yield, compounded quarterly for 2 years, A = $1,000 * (1 + (0.05 + 0.02)/4)^(4*2) = $1,141.96.

Each of these calculators will help you understand the growth of your investments based on different scenarios and assumptions. It's always wise to consult with a financial advisor for personalized investment strategies.