Compound interest can create a sizable account over time. |
Over the period of years we are looking at your investment at X interest rate looks very impressive. At first glance, it looks as if you spent X to get Y. |
This screen calculates the future value of an ideal investment. By this we mean a hypothetical investment with no taxes, fees, or expenses associated with it that grows annually at an assumed total rate of return. This is the same solution found by a standard time value of money calculation for Future Value. Future Value = FV(Total Rate of Return, Years of Accumulation, Annual Contribution, Initial Balance, Contributions at Beginning of Period) A year-by-year illustration of this solution is displayed in worksheet form by clicking the Documentation button. |