Subway Calculator

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Reviewed and Fact-Checked by:

David Chen, CFA (Chartered Financial Analyst)

Use this **Simple Investment Return Calculator** to quickly determine any missing variable—Initial Investment, Annual Rate, Time Period, or Future Value—based on simple interest calculation principles.

Investment Return Calculator

The missing variable has been calculated: —

Simple Investment Return Formula

F = P $\cdot$ (1 + (R/100) $\cdot$ T)

Formula Source & Further Reading: Investopedia – Simple Interest, The Balance – Future Value Basics

Variables Explained

  • Initial Investment (P): The original amount of money invested or borrowed (Principal).
  • Annual Rate (R, %): The yearly interest rate, entered as a percentage (e.g., 5 for 5%).
  • Time Period (T, Years): The duration over which the money is invested or borrowed.
  • Final Value (F): The total amount after the time period, including the principal and the interest earned.

Related Calculators

What is an Investment Return Calculator?

An Investment Return Calculator, using the simple interest model, is a fundamental financial tool designed to estimate the future growth of an investment based on a fixed annual rate over a specified period. It provides a straightforward way to understand the trade-offs between the principal amount, the rate of return, and the time horizon.

Unlike more complex tools that account for compounding interest, this calculator gives a quick, baseline figure. Its primary utility lies in its flexibility to solve for any missing component. For instance, if you know how much you want in the future (F) and how long you plan to save (T), you can determine the required Annual Rate (R) needed to meet your goal.

This calculation is often used for initial planning, comparing different investment opportunities quickly, or analyzing loans where the interest is calculated only on the original principal.

How to Calculate Investment Return (Example)

Example: You invest $5,000 (P) for 8 years (T) at an annual simple interest rate of 6% (R).

  1. Convert Rate: Convert the percentage rate to a decimal: $6\% / 100 = 0.06$.
  2. Calculate Simple Interest: Multiply the principal by the rate and time: $I = P \cdot R \cdot T = \$5,000 \cdot 0.06 \cdot 8 = \$2,400$.
  3. Calculate Final Value: Add the interest to the principal: $F = P + I = \$5,000 + \$2,400 = \$7,400$.

Frequently Asked Questions (FAQ)

What is the difference between simple and compound interest?

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal amount plus any accumulated interest from previous periods. Compound interest leads to faster growth over time.

Can I use this calculator to find the required time period (T)?

Yes. If you input the Initial Investment (P), the Annual Rate (R), and your desired Final Value (F), the calculator will determine the number of years (T) required to reach that goal.

Why is the Annual Rate entered as a percentage (e.g., 5) and not a decimal (e.g., 0.05)?

For user convenience, the input field accepts a standard percentage value (e.g., 5). The internal JavaScript logic automatically divides this input by 100 before using it in the formula.

What happens if I enter all four variables?

If all four are entered, the calculator will perform a consistency check. It will calculate the Future Value (F) based on P, R, and T, and compare it to the entered F. A message will confirm if the values are consistent or detail the required adjustment.

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