Investment Calculator

Interactive Investment Calculator

Understanding Investment Calculations

The concept of future value is related to time value of money. For example, if you deposit your money in a bank for a certain period of time, you will earn a certain amount of money based on the compound interest. This interest is computed periodically, and it is added to the principal. Interest for the following period is computed based on the initial principal plus the interest (the amount which becomes your new principal). Subsequent interests are computed in the same way.

In our Future Value Calculator, we are given a known present value and we want to calculate how much will be the future value after a numbers of years compounded upon a certain interest rate. In that example, we use the formula:

FV = PV × (1 + i / 100)ⁿ

To calculate the future value. However, in this example, we already have a target future value in mind and we wish to know how much money we need to invest to achieve the target based on a certain interest. Though we still can employ the same basic formula, this time we preferred to use the VB built-in present value function, or PV.

The syntax of the PV function is:

PV(Rate, Nper, Pmt, FV, Due)

Where:

• Rate = Interest rate
• Nper = The length of period (Usually number of years)
• Pmt = Periodic payment
• FV = Future Value
• Due = 1 if payment due at beginning of a period and Due=0 if payment due at the end of a period.

In our example, we are considering one single initial investment in order to earn a certain amount of money in the future, so Pmt is set to 0, and payment due is at the beginning of the period, so it is set at 0.

Code Implementation

Private Sub cmdCal_Click()
    Dim F_Money, Int_Rate, Investment As Double
    Dim numYear As Single
    
    ' Get user input
    F_Money = Val(Txt_FV.Text)
    Int_Rate = (Val(Txt_Rate.Text) / 100)
    numYear = Val(Txt_Year.Text)
    
    ' Calculate present value (investment required)
    Investment = PV(Int_Rate, numYear, 0, -F_Money, 1)
    
    ' Display result
    Lbl_PV.Caption = Format(Investment, "$##,###,##0.00")
End Sub

Private Sub btnCalculate_Click(ByVal sender As System.Object, 
                            ByVal e As System.EventArgs) Handles btnCalculate.Click
    Dim futureValue, interestRate, years, investment As Double
    
    ' Validate and parse inputs
    If Not Double.TryParse(txtFutureValue.Text, futureValue) Or 
       Not Double.TryParse(txtInterestRate.Text, interestRate) Or 
       Not Double.TryParse(txtYears.Text, years) Then
        MessageBox.Show("Please enter valid numeric values")
        Return
    End If
    
    ' Convert interest rate to decimal
    interestRate = interestRate / 100
    
    ' Calculate investment required
    investment = futureValue / Math.Pow(1 + interestRate, years)
    
    ' Display formatted result
    lblResult.Text = investment.ToString("C2")
End Sub

function calculateInvestment() {
    // Get input values
    const futureValue = parseFloat(document.getElementById('futureValue').value);
    const interestRate = parseFloat(document.getElementById('interestRate').value) / 100;
    const years = parseFloat(document.getElementById('years').value);
    
    // Validate inputs
    if (isNaN(futureValue) || isNaN(interestRate) || isNaN(years) ||
        futureValue <= 0 || interestRate <= 0 || years <= 0) {
        alert('Please enter valid positive numbers');
        return;
    }
    
    // Calculate present value (investment required)
    const investment = futureValue / Math.pow(1 + interestRate, years);
    
    // Display result
    const resultBox = document.getElementById('resultBox');
    const resultValue = document.getElementById('resultValue');
    
    resultValue.textContent = '$' + investment.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
    resultBox.style.display = 'block';
}

Key Financial Concepts

Practical Applications