Investment calculator as a way to increase business profitability
The digitalization of the financial sector is pushing banking and brokerage structures to invest in creating unique products. Almost every major bank has an investment calculator in its functionality. What is this tool and why should its indicators be treated with caution?
An investment calculator is a special tool that allows you to predict the investment return on invested funds over a given period of time.
The purpose of the investment calculator
Calculating profitability is a rather difficult task for a novice investor, you need to know the features of the formation of deposits and the algorithms of the financial system, take into account tax rates and interest on deposits. The task is not easy. With the calculator, an investor can:
- find out the key indicators of the deposit with and without capitalization;
- determine the profitability of deposits, taking into account capitalization and possible replenishment;
- calculate the profitability of the deposit, taking into account the reinvestment of funds and compound interest;
- perform a quick automatic calculation of the contribution indicators.
How the investment calculator works
The principle of using the investor calculator is quite simple – data is entered into the text field and the virtual action key is pressed, usually the word “CALCULATE” is written on the button. The program automatically performs calculations and displays a graph of financial return for the investment period specified in the table.
To obtain investment results, you will need:
- Amount of initial deposit.
- Currency selection.
- A rate that will show the expected return on the selected financial instruments.
- Investment period.
- The amount of funds that are planned to be additionally withdrawn or reported to the account. In the first case, the text field indicates the amount of funds with a “-” (minus) sign. In the second case, the amount to be added is entered in the “regular contributions” box.
To carry out the calculation, taking into account the indicators of “compound interest”, it is necessary to use a more complex program, which not all banking and financial resources possess.
The investment calculator with reinvestment allows you to calculate the capitalization of profit on the invested amount plus the previously accrued interest. Choosing an investment option taking into account the “compound interest”, the investor receives a higher profit. After all, he constantly not only replenishes the account, but also allows the capital to work.
Advisory role of the investor calculator
The online investment calculator is an excellent tool for strategic long-term planning and understanding what funds an investor can have at the end of the reporting period. However, it should be borne in mind that the calculator is only advisory and informative, its task is to calculate the estimated result, according to the entered data.
Like any financial instrument, the calculator has a number of disadvantages. It doesn’t take into account:
- tax deductions, etc.
All the risks of private and business investments, the choice of strategy and the exact calculation of potential profitability, the investor takes on. How not to be mistaken given the unstable situation of the international market in the situation with the pandemic and sanctions? The best option is to contact a licensed broker or transfer funds to trust management. The ecosystem of investment products and services on the Аmir Сapital blockchain works according to this principle.
Innovations in the system for calculating the profitability of funds
One of the interesting innovations in the calculation of potential profitability can be considered the use of ready-made strategies within the framework of trust management. The task of the investor is to study the indicators of the so-called TIMA-accounts and understand how he is satisfied with the potential profitability of the leading asset managers of the company. Based on their ready-made strategy, you can make a calculation on the service calculator and find out what profit will be at the end of the investment period when investing funds in the selected TIMA account. Undoubtedly, you will have to take into account the commission of the manager, but still this is a good option for inexperienced investors.
For more information about calculating the return on deposits, the operation of such tools as an investment calculator, building a strategy for building a portfolio with highly liquid assets, please contact the specialists of Amir Capital.