Initial Investment Calculator
Overview
This calculator helps in finding the initial investment required in order to receive a desired future capital amount.
Instructions
1. In the first line, enter the required future capital amount.
2. In the second line, enter the fixed annual interest amount on the investment (without the % sign).
3. In the third line enter the period of the investment, the period over which the interest will accrue, to give the final amount at the end of the period.
4. The fourth line relates to interest. If the interest is calculated on an annual basis, select the number 1, and if it is calculated on a quarterly basis, select the number 4.
5. After programmingthe data, the initial investment amount required will appear.
Example
John wants to buy a car in 4 years time at a cost of $30,000.
The price of the car, which is the amount he wants to obtain after 4 years, is typed in the line.
The annual rate of interest received by John is 4%.
In the third line, we enter the investment period as 4 years.
The interest is calculated on an annual basis.
In order to receive $30,000 in 4 years time at 4% interest per annum calculated annually, John's current investment will be $25,644.