What is an investment?
An investment is defined as purchasing the financial instruments or other assets in order to gain the profits. The goal of investment is to generate income from the assets. In finance, an investment is purchasing the goods with an idea that the assets will create profits in future or sold at a higher price for profits.
The key variables of investment:
There are main key variables of investment. This four are the crucial elements of investment.
- Return rate: The return on the investment. The profit gained on the financial investment made.
- Starting amount: Basically the principal amount invested. In practical terms, the large amount saved up for make investment.
- End amount: The amount at the end of the life of the investment.
- Investment length: The time period of the life of an investment. Generally, the investment length is longer.
- Additional contribution: The additional contribution is referred to annuity payment in the financial investments.
Types of investments:
- Bank products: The amount can be deposited in the bank as a fixed deposit so that bank pays interest for the fixed deposits.
- Bonds: The bond is loan that the investor pays to the organization in exchange for interest payment over a period of time and repayment of principal at the maturity of the bond.
- Stocks: Buying the company’s stock is like owning a piece of the company. Stocks come in different varieties short-term, long-term growth.
- Real estates: Purchasing a real estate property in rising location. Which gives profits even after selling the property.
- Commodities: purchasing precious metals like gold, silver, gas etc. The gold and silver rates may increase or decrease but it is valuable because they are finite resources. Oil and gases are very popular investments and demand for these commodities are high.
This calculator helps you find the specific parameter for investing. You can easily find out the parameters.