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There are many different types of investment calculators available to fit most any investor's needs. Investment calculators may include one or more features to calculate a particular type of investment, including time value, dollar-cost averaging and inflation. Investors may find calculators that are hand held devices, free or paid applications for their smart phone, or they may find them on the Internet for free, or with a paid service.
A time value calculator helps to determine what the future value of an initial investment. The time value investment calculators can also handle determining the future value of the investment if the investor makes periodic deposits into the account over time. In order to use this calculator, the investor must input a hypothetical or estimated rate of return that the investment is paying and the time period for the investment.
Other types of investment calculators are dollar-cost averaging. Dollar-cost averaging is a specific type of investing strategy for an investor who invests a set amount of money on a regular basis. The strategy allows investors to control how much of the cash is invested in the investment depending on what the price of the investment is doing. For example, if the price of the investment is dropping, then the strategy allows the investor to purchase more of the investment.
The dollar-cost averaging calculator allows investors to estimate how much the investment account will be worth at the end of a 12-month period. The calculator does require the user or the investor to input some hypothetical information. The estimated information includes the rate of return on the investment and an estimate per share price for the investment.
Inflation can easily eat away at the value of an investment account. Using an inflation calculator allows investors to invest today so that their investments beat the inflation of tomorrow. By inputting the information on the investments, the user or investor of these types of investment calculators helps them to determine if they are putting their money in investments that will continue to grow and stay ahead of the rate of inflation.
Standard financial calculators allow users to determine other variables. Future value, present value, interest rates and time periods are all variables that a user of a financial calculator can determine. In order to calculate one of these variables, though, all of the remaining variables must be known or estimated. for example, if determining the present value of an investment, then the future value, interest rate and time of investment must be known and inputted in the calculator.
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