Mutual funds are groups of stocks or bonds that investors collectively use to save money. If you plan to reach a high level of savings, you must seek a mutual fund that offers a high annual percentage yield, also known as the annual percentage rate (APR). But other factors that increase your returns reduce the percentage yield that you need. If you manage to invest more money in the mutual fund, you don't need as high an APR to generate the same savings. You also don't need as high an APR to reach a particular target if you invest for a longer period.
Enter the sum that you plan to invest annually in the mutual fund into a physical or online financial calculator, and then press the calculator's "PMT" button. For example, if you plan to invest $2,000 into a mutual fund each year, enter "2000."
Enter the number of years for which you plan to invest, and then press the "n" button. For example, if you want to invest in the mutual fund for 12 years, enter "12."
Type "0" and then press "PV" to represent your investment in the mutual fund before contributing any money to it.
Type the amount of savings that you home to accumulate, and then press "FV." For example, if you want a mutual fund that will help you save $40,000, enter "40000."
Press the calculator's "compute" button and press "i" to find the mutual fund's percentage yield. With this example, you need a mutual fund that offers an estimated annual percentage yield of 8.88 percent.
Ryan Menezes is a professional writer and blogger. He has a Bachelor of Science in journalism from Boston University and has written for the American Civil Liberties Union, the marketing firm InSegment and the project management service Assembla. He is also a member of Mensa and the American Parliamentary Debate Association.