How to interpret an investment projection

Compound growth

General investment mode applies the familiar compound-growth relationship: an initial amount grows by a selected percentage each completed compounding period, and future growth is applied to the updated balance. A 7% return every year is therefore very different from 7% every month.

The compounding interval matters

PayCalc lets the rate be defined per day, week, month, or year and lets the interval contain more than one unit. The percentage entered applies to that complete interval. For example, 3% every two weeks means 3% is applied once for each completed two-week period; it does not mean 3% annually divided across two-week periods.

Completed periods and duration

To make mixed units predictable, PayCalc converts durations using average civil day lengths and counts full completed compounding intervals. Partial final periods are rounded down. This is appropriate for an illustrative discrete-compounding model, but it may differ from products that accrue returns daily or use exact calendar conventions.

Negative returns and extreme assumptions

A negative per-period return above -100% reduces the projected balance and can illustrate losses. Extremely large rates combined with high compounding frequency can exceed the numeric range of browser arithmetic. PayCalc detects those cases and asks the user to reduce the rate, frequency, or duration instead of displaying a misleading zero.

Rental-property yield

Rental mode is intentionally simpler than a full real-estate investment model. Gross rental yield is annual rent divided by purchase value. Net rental yield subtracts the entered annual service charges and other annual expenses before dividing by purchase value.

The model is unlevered: it does not automatically include mortgage financing, acquisition costs, property taxes, insurance, maintenance, vacancy, management fees, appreciation, sale costs, or income taxes. Add those items to “other annual expenses” where appropriate, or use a more detailed property model for an investment decision.

Projection is not prediction

Historical or assumed rates do not guarantee future performance. A compound-growth calculator answers “what happens mathematically if this rate repeats?” It does not answer “what return will this investment actually earn?”

Try a scenario in the Investment Calculator, or review the PayCalc methodology.