TOOLS: Compound Interest Calculator
In an upcoming post, I plan to discuss some of the caveats people should consider when using compound interest projections (i.e. how money grows over time).
So, I was looking for a financial calculator to run sample calculations, when I came across a nice one from MoneyChimp.com.
To project how much your 401(k), or other investments, will be worth when you retire, simple click here and enter the following variables:
- Current Principal: The amount you have today, which can be any amount including zero.
- Annual Addition: The amount you plan to save on an annual basis (in your 401(k), Roth IRA, etc.).
- Years to Grow: Number of years between now and your planned retirement year.
- Interest Rate: The rate of return you anticipate making on your investments. Remember, this should be after expenses and, if applicable, also AFTER TAXES.
- Compound Interest: This number reflects how often interest is redeposited into your original investment. Use 365 for daily, 12 for monthly, 4 for quarterly, or 1 for annually. If you arent sure, just use 1.
- Future Value: This is the result, showing how much money you will have (based on the variables used in the calculation).
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