Required Rate Calculator
Enter your assumptions for lumpsum and SIP investments, duration, and expected future value to calculate the required annual rate of return .
What is Required Rate?
A Required Rate calculates the annual rate of return needed to achieve your financial goals. By entering your starting investment, periodic investments, future goal value, and the desired timeframe, the required rate calculator will compute the required rate of return to meet your target.
How Can a Required Rate Calculator Help You?
A Required Rate Calculator helps you determine the annual return rate needed to achieve your financial goals within a specific timeframe, ensuring effective investment planning and informed decision-making.
Whether you are planning for retirement, saving for a major purchase, or building an investment portfolio, the required rate calculator provides valuable insights to help you strategize effectively.
How Does the Required Rate Calculator Work?
The required rate can be calculated using the Internal Rate of Return (IRR) function. The IRR is the discount rate at which the Net Present Value (NPV) of all cash flows (both incoming and outgoing) from a particular investment is zero.
- Formula for IRR: NPV = ∑(1 + r)^t * C_t = 0
- C_t represents the cash flow at time t
- r is the discount rate (IRR) that we are trying to find
- n is the number of periods