# Overview

#### Main Menu Name: **Summary**

Calculates and summarizes the resources needed to accomplish major financial objectives such as funding college education or retirement. It determines the future amount needed after considering a specified inflation rate and a specified rate of return, the annual deposit at the specified rate of return necessary to achieve the goal, the total future amount needed to meet all specified goals, and the annual deposit required to achieve the stated objectives.

### In this article:

# Background

The most important step in turning dreams into reality through goal identification is stating objectives in financial terms. Quantifying goals using the "time value of money" has two effects.

First, the process must reflect the negative effects of inflation on funding future goals. One dollar of cost today will equal two dollars in twelve years if inflation takes place at six percent annually.

Second, funds invested today have the benefit of future growth, and larger sums will be available in the future, especially if sheltered from income taxes.

Inflation-adjusted time value calculations show the dollar amount needed now or on an annual basis to reach targeted objectives.

# Why should I use this calculator?

- To determine the degree to which assumptions are realistic and attainable.
- To revise goals when appropriate.
- To evaluate investment yields in relation to risk-taking propensity and goal importance.

# Getting Started

The most important step in turning dreams into reality through goal identification is stating objectives in financial terms. Quantifying goals using the "time value of money" has two effects.

- First, the process must reflect the negative effects of inflation on funding future goals. One dollar of cost today will equal two dollars in 12 years if inflation takes place at six percent annually.
- Second, funds invested today have the benefit of future growth, and larger sums will be available in the future, especially if sheltered from income taxes.

Inflation-adjusted time value calculations show the dollar amount needed now or on an annual basis to reach targeted objectives.

# Entering Data

**Projected Inflation Rate:**Enter the projected inflation rate.**Projected Return Rate:**Enter the projected return rate on the investments.**Goal**Enter up to four goals.**Amount Needed:**Enter the amount that is needed to reach the goal(s). This amount should be stated in terms of current dollars.**Years to Go:**Enter the number of years until the funds are needed.

# Results

The program provides a total amount of money that is needed (depends on how many goals are entered). Once this amount is known, the program calculates the inflation-adjusted amount needed to achieve each specified goal at the end of its respective time period (accumulation period). It also calculates the annual deposit that is required to accumulate the future amount for each objective.

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