Interest rate calculators determine the effects of interest on account balances. This page gives an overview of our types of interest rate calculators, which serve practical as well as academic purposes.
Generally, the calculations perform valuations of interest bearing accounts. They also assess investment performance and help selecting profitable investment opportunities. Moreover, the computations are useful for drafting and verifying financial service contracts. For instance, the installment loan calculators compute loan contract details like the height of installments. As another application, the savings plan calculator projects balances for certain types of pension insurances.
In addition to valuation functions, all calculator pages include explanations on the underlying financial economics and mathematical formulas. They are therefore suitable for trying out the theoretical effects of compound interest at practical examples.
Compound Interest Calculator
The compound interest calculator outputs the exponential growth of a one-off investment with compound interest. In order to understand the compound interest effect, this calculator will be a good starting point.
Savings Plan Calculator
The savings plan calculator accumulates wealth with compound interest, much like the simple compound interest calculator. However, in this application, savers pay regular contributions and not a one-off investment as before. As a consequence, the increase in value through contributions initially outweighs capital gains.
Present Value Calculator
The present value calculator determines the value of future income at present time. In contrast to the previous examples with exponential growth, this application of compound interest has the reverse effect of an exponential decline.
Pension Present Value Calculator
The pension present value calculator determines the current value of long-term pension entitlements. It converts constant, regularly drawn payments into a one-time payment that is drawn immediately. An example application would be an option to have a pension insurance paid out as an immediately due severance payment. As indicated in the diagram below, even pensions drawn at perpetuity have finite present values. Therefore, a conversion into a one-time payment is (almost) always possible.
The inflation calculator determines losses in purchasing power due to inflation. Results are equivalent to those of the present value computation, except that the applicable interest is not a market rate, but derived from price indices.
Asset Valuation Calculator
The asset valuation calculator provides a simple method of estimating fair purchase prices for investment assets. In order to find a fair price, it computes the market value for all the income that an asset generates. This calculator can help selecting profitable investment opportunities. However, when low rates of return create speculative bubbles, its valuation method may fail.
Return on Investment Calculator
This interest rate calculator determines the annualized return on investment (ROI) from buying and selling assets assuming exponential growth.
Installment Loan Calculators
The installment loan calculators are interest rate calculators for the drafting and verification of installment loan contracts.
Compound interest: Wikipedia.org
Mortgage Loans: Wikipedia.org
Amortization calculator: Wikipedia.org
Interest rate calculators in German: zinseszins.de