A forex savings and investment calculator is said to be a mathematical calculator used to analyze specific parameters for an investment plan. A forex savings and investment calculator is also used to equate the effectiveness of two or more different investments by measuring the amount of return rate on a particular investment in comparative to the investments cost. The following Parameters are analyzed in a forex savings and investment calculator:
- RETURN RATE: This can be defined as the profit or loss acquired from a particular investment over a specific period of time which is always stated as a percentage of the investments cost. Investment return rate can also be seen as the net amount of discount cash flow gotten from a specific investment
- STARTING AMOUNT: This is also known as the principal amount which is the initial amount used at the commencement of the investment.
- END AMOUNT: This can be defined as the anticipated amount at the close of the investment.
- INVESTMENT LENGTH: This can be defined as the period in which the investment was conducted. Usually, the lengthier the investment, the higher the risk involved. This is because of the unpredictable future of the investment. This means the longer the time involved in an investment, the more amplified the return becomes and the bigger the rewards.
- ADDITIONAL CONTRIBUTIONS: This is also called annuity payment and it stands in form of any additional contributions of an investors cash during the length of an investment will lead to increase in returns and greater amounts.
DEFINITION OF TERMS
Savings can be defined as the remaining amount left when the cost amount of an investment and expenditure is subtracted from the amount of disposable an investor earns in a specific period of time. For investors who are financially cautious, their savings amount after all expenditures have been met can be very encouraging while for other investors who have to rely on credits for their investment, there will be no savings.
This can be defined as an asset that is bought with the expectation that it will yield income/profits and increase in the future. An investment is also said to be the buying of goods that will not be expended today but are used in the future to generate income.
HOW TO CALCULATE SAVINGS AND INVESTMENT PLAN USING A FOREX SAVINGS AND INVESTMENT CALCULATOR
The savings and investments calculator can be used to calculate the savings expected from an investment. This simple calculator can be downloaded and calculated online. This calculator automatically calculates and displays the result an investor’s savings.
It has different columns which indicate boxes where an investor can impute parameters such as return rates, starting amounts, end amounts, investment lengths and additional contributions. After inputting the values of these parameters, a click on the calculate button will automatically calculate and display results.
ADVANTAGES OF SAVING EARLY
POWER OF INCREASE: With the use of forex savings and investment calculator, one can experience an increase from early savings. This is one of the greatest advantages of early savings. This feature allows an investor to yield additional money on the interest acquired from a particular investment. This means that the ability to save early to a considerable level and amount of period helps to yields more income by saving in lesser amounts.
FINANCIAL DISCIPLINE: Another great advantage of using forex savings and investment calculator for early savings is that it helps an investor to develop financial discipline. If an investor has the ability to invest his money sincerely, he knows how much money that will be remaining and through this, he will learn the importance of spending less. This is pure discipline.
PROPER MANAGEMENT OF INVESTMENT RISK: the market is much known for its rate of currency fluctuations and uncertainty, and statistics have shown that the capital market favors investors with lengthier investment capacities therefore by using forex savings and investment calculator for saving early, an investor gives this money the additional time required remediate the market risk and come out successful.
ADVANTAGES OF AN EARLY INVESTMENT
THE TIME ADVANTAGE: Even if money might be constricted, young and early investors have a time benefit. There is a great advantage seen in compounding the capability to increase an investment by venturing into a reinvestment of all earnings. The benefit of compounding permits early investors to produce wealth over time. This wealth can be calculated with the use of a forex savings and investment calculator.
THE ADVANTAGE OF TAKING RISK: the older an investor gets in the field of investment, the more risk he takes. An investor’s age have a huge impact on the number of risk he can endure. Early investors has the capability to take more risks in their investment deeds. Old investors are prone to taking limited investments risks or risks that are totally free of charge while early investors takes more risk and generate more profits and gains.