Return on Investment Calculator

A Python script to calculate the return on investment (ROI) for a given principal amount over a specified investment duration, considering various parameters such as compounding frequency, contributions, inflation, and taxes.

Table of Contents

• Introduction
• Usage
• Parameters
• Examples
• License

Introduction

This Python script calculates the return on investment (ROI) for a given principal amount over a specified investment duration, taking into account various financial parameters. It provides a flexible tool for analyzing investment strategies by allowing you to customize factors such as compounding frequency, contributions, inflation, and taxes.

Usage

To use this script, simply import the calculate_return_on_investment function and provide the required parameters. You can then call the function to obtain the final balance and a list of periodic earnings.

from investment_calculator import calculate_return_on_investment

# Example usage
principal = 10000  # Initial principal amount
annual_roi = 0.05  # Annual return on investment (as a decimal)
terms = 12 # Months taken until the next earning is yield
annual_contribution = 1200 # Annual contribution amount for further investing 
investment_duration = 10  # Investment duration in years

# Call the function
final_balance, periodic_earnings = simulate_compound_return(
    principal,
    annual_roi,
    terms,
    annual_contribution,
    investment_duration
)
# Print the results
print(f"Final Balance: ${final_balance:.2f}")
print("Periodic Earnings:", periodic_earnings)

Parameters

• principal (float): The initial principal amount.
• annual_roi (float, default: 0.01): Annual return on investment as a decimal (e.g., 0.05 for 5%).
• compounding_frequency (int, default: 12): Number of times interest is compounded per year.
• annual_contribution (float, default: 0.0): Annual contribution amount to the investment.
• investment_duration (int, default: 5): Investment duration in years.
• retirement_at (int, default: 0): Number of years until retirement (0 for no retirement).
• retirement_income (float, default: 0.0): Monthly retirement income (if retirement_at > 0).
• retirement_contribution (float, default: 1200): Monthly contribution during retirement (if retirement_at > 0).
• inflation_rate (float, default: 0.0): Annual inflation rate as a decimal (e.g., 0.03 for 3%).
• tax_percentage (float, default: 0.0): Annual tax rate on earnings as a decimal (e.g., 0.2 for 20%).

Examples

You can find example usage of this script in the examples directory. There is one example that demonstrates an investment scenario and provides detailed usage instructions.

License

This project is licensed under the MIT License - see the LICENSE file for details.