Decision-based financial calculators
Sunday, April 23rd, 2006Why do we need decision-based financial calculators?
Most calculators calculate the usual financial situations. However, financial decisions had over the years became more complicated due to more innovative financial products available in the market. For instance, banks offer mortgages with lower interest rate for the first three years or with bi-weekly instalments. Such development makes comparison of financial products or investment opportunities increasingly difficult.
Decision-based financial calculators help the users’ decision making process based on more specific scenarios.
One of the usual problems in comparing investment opportunities is the comparison of investment in rental properties and mutual funds. Investing in properties involves leverage. We cannot use the return over the cost of the rental properties to compare against the return over the investment in mutual funds. It is like comparing Apple and Orange.
Other financial decisions that we need to make in life
- Home mortgages planning
- Debts reduction planning
- Wealth building strategies, etc.
Therefore, decision-based financial calculators are simply essential enabling us making financial decisions logically.