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Compare different assets, for example, the S&P 500 with gold and housing, and optionally adjust for inflation.
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# Time Value of Money TutorialsTVM Calculations

## How to Calculate Income from an InvestmentTutorial 3

Calculating income just may be the quintessential financial calculation. This tutorial will teach you how to use the Ultimate Financial Calculator to calculate the income that can be expected from an investment.

This example applies to our online Ultimate Financial Calculator. The   C-Value! program for Windows works in a similar way and has a few more features including the ability to save your work.

All users should work through the first tutorial to understand basic concepts about the calculator.

Broadly speaking investment and savings cash flows will fall into one of four groups with the following characteristics:

• A series of deposits followed by one withdrawal. This cash flow pattern is typical for a savings plan.
• The second type of cash flow assumes one initial deposit (investment) followed by a series of withdrawals. An annuity, a financial product often purchased for retirement income, follows this cash flow pattern (this tutorial).
• The final type is a completely random pattern. Multiple investments (deposits) with intermittent returns (withdrawals). Stock, bond or mutual fund investing is representative of this cash flow pattern.

The Ultimate Financial Calculator can easily handle any of these cash flow patterns as well as variations of each pattern.

To create an investment schedule with a single initial investment and assuming 25 years of monthly withdrawals, follow these steps:

1. Set "Schedule Type" to "Savings"
• Or click the [Clear] button to clear any previous entries.
• The top two rows of the grid will not be empty
2. Set "Rounding" to "Adjust last interest" by clicking on the {Settings} {Rounding Options}
1. Set "Initial Compounding" to "Daily".
2. Enter 5.0 for the "Initial Interest Rate".
3. Create a "Deposit" event in row one of the cash flow input area.
1. Set the "Date" to September 1st, 2016 (09/01/2016)
2. Set the "Amount" to 750,000.00
3. Set the "# Periods" to 1.
4. Note: Since the number of periods is 1, you will not be able to set a frequency. If a frequency is filled in, it will clear automatically.
1. Click on the second row of the cash flow input area. Select "Withdrawal" for the "Event Type".
1. The date will already be set to October, 1st 2016 (mm/dd/yyyy)
2. Set the "Amount" to "Unknown" by typing "U". This tells the calculator to calculate the final withdrawal amount
3. Set the "# Periods" to 300.
4. Use the [Tab] key to tab to Frequency. Select "Monthly".
5. The "End Date" will automatically be calculated (09/01/2041). (300 monthly periods is 25 years.)
• Your calculator should now look like this: