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Short-Term Investment Calculator

Last updated 30th Sep 2022

This short-term investment calculator allows you to figure out how much money you need to set aside today to purchase an asset or pay for an expense in the future. The calculator takes into consideration the following factors: anticipated price increases, years until purchase, the return on the short-term investment, and your marginal income tax rate.

Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

Current Cost of Asset ($)

This is the current selling price, or the market price, of the asset you want to buy in the future. This could be a boat, car, or even an expense such as an upcoming wedding or paying for college.

Projected Annual Price Increase (%)

This is the projected annual increase in the asset, or expense, stated as a percentage increase.

Years Until Purchase (Years)

This is the number of years until you make the purchase, or incur the expense.

Annual Return on Investment (%)

This calculator assumes that you want to set aside money today to make a purchase in the future. Until that money is used to make a purchase, it can be invested. This cell is the expected return on that investment.

Income Tax Rate (%)

Unless your short-term investment is free of federal income tax, any return on investment (such as interest) will be subject to federal and / or state income taxes. In this cell you would enter your marginal, or incremental, tax rate.

Estimated Future Cost of Asset ($)

The estimated future cost of the asset or expense is calculated by taking the current cost of the item and increasing it by the projected annual price increase(s).

Total Return on Investment (%)

The total return on investment is found by compounding the projected annual return on investment over the number of years until purchase.

After Tax Total ROI (%)

The after tax return on investment is the actual return you'll realize. This value takes the total return on investment, and lowers it by the marginal income tax rate entered earlier.

Short-Term Investment ($)

The short-term investment is how much money you'll need to set aside today in order to have enough money to make the desired purchase at a future point in time.

Short-Term Investment Calculator

Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.

Moneyzine Editor

Moneyzine Editor