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home > education > financial tools > savings > compound interest and your return calculator |
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 Glossary Terms 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 2004, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% 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.
*This Web site contains tools and
calculators that are hypothetical in nature and used for illustrative purposes
only. They do not reflect the actual performance of any Touchstone mutual fund
or variable annuity. |
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| Updated 7/6/2007 |
