Investment Amount - The amount of your initial
investment.
Interest Rate - The annual interest rate for
your investment. The actual rate of return is largely
dependant on the type of investments
you select. From January 1970 to December
2003, the average compounded rate of
return for the S&P 500, including reinvestment
of dividends, was approximately 11.7%
per year. During this period, the highest
12-month return was 64%, and the lowest
was -39%. Savings accounts at a bank
pay as little as 1% or less. It is important
to remember that future rates of return
can't be predicted with certainty and
that investments that pay higher rates
of return are subject to higher risk
and volatility. The actual rate of return
on investments can vary widely over time,
especially for long-term investments.
This includes the potential loss of principal
on your investment.
Compound
Interest - Interest on
an investment's
interest, plus
previous interest.
The more frequently
this occurs,
the sooner your
accumulated interest
will generate
additional interest.
You should check
with your financial
institution to
find out how
often interest
is being compounded
on your particular
investment.
Years - Number
of years
for this
investment.
Yearly
APY - Annual
percentage yield
received if
your investment
is compounded
yearly.
Quarterly
APY - Annual
percentage yield
received if
your investment
is compounded
quarterly.
Monthly
APY - Annual
percentage yield
received if
your investment
is compounded
monthly.
Daily
APY - Annual
percentage yield
received if
your investment
is compounded
daily. |
