We all know the importance of understanding the impact of compounding interest!
If not, this is an ideal opportunity to understand this very important concept and have it handy in your Financial Calculations toolbox!
Do you want to know how well your Investments perform and how long it will take to double your current investments? This calculator gives you the benchmark to determine how good (or not so good) a potential investment is likely to be. In Financial calculations, we use the rule of 72. The rule says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72.
For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years.
Rule of 72 Formula: Years = 72 / rate OR rate = 72 / years
We’re assuming the interest is annually compounded, by the way. You can use this calculator for any financial investments.
Please note this is for education purposes only as it does not take into account any Tax implications.
If you have any investments, then Returns are CRITICAL.
Another important aspect to look at is the costs involved per annum.
Reasons You Should Measure your Investments on an annual basis:
+ You want to grow your NET WORTH over time!
+ It’s easy to overlook the costs and then you don’t get a real return on your investments.
+ It will give you peace of mind, that you do have money invested in the right places.
IF YOU’VE BEEN MANAGING YOUR OWN INVESTMENTS AND THEIR PERFORMANCE OVER THE PAST FEW YEARS, YOU’VE LIKELY NOTICED THAT THERE WILL ALWAYS BE MARKET FLUCTUATIONS.
Exactly the reason why you need to understand this, to also ask your investment adviser on providing you with more details on the specific products.
THE MORE YOU UNDERSTAND HOW TO DO SIMPLE CALCULATIONS ON YOUR OWN PORTFOLIO, THE MORE YOU CAN BE IN CHARGE OF YOUR OWN FINANCIAL SUCCESS AND DESTINY!
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