Regular Saving Calculator
Our regular savings calculator is a tool that helps you determine how much money you can accumulate over time by regularly saving a fixed amount of money. It takes into account factors such as the initial deposit, the monthly contribution, the interest rate, and the time period.
Here’s the simple formula to calculate the future value of regular savings:
FV = P * ((1 + r)^n – 1) / r
FV = Future Value of the savings
P = Monthly contribution amount
r = Monthly interest rate (decimal form)
n = Number of months
To make it easier for you, let’s use an example:
Let’s say you want to save $200 per month for 5 years with an annual interest rate of 5%. We need to convert the annual interest rate to a monthly rate by dividing it by 12:
r = 0.05 / 12 = 0.0041667
n = 5 years * 12 months = 60 months
Now, we can plug these values into the formula:
FV = 200 * ((1 + 0.0041667)^60 – 1) / 0.0041667
Calculating this gives us:
FV ≈ $12,834.94
So, by saving $200 per month for 5 years with a 5% annual interest rate, you would accumulate approximately $12,834.94.
Keep in mind that this is a simplified calculation and doesn’t take into account factors like taxes or any fluctuations in interest rates. Additionally, the actual amount you accumulate may vary depending on the specific terms of your savings account or investment vehicle.