Savings Goal calculator helps you to calculate how much you need to invest monthly to save the desired amount in a given time period with compound interest on top.
Do you want this calculator?
Savings Goal Formula with Compound Interest rate
We can use the same formula that we have used to calculate the total savings when you invest an initial amount and add a recurring deposit with Compound Interest on top.
Compound Interest Formula with Recurring Deposits
Where
A = Savings total at the end of tenure.
P = Initial Deposit
Q = Monthly recurring deposit that she needs to invest
r = Annual Interest rate
n = Compound interest deposition frequency
(Monthly = 12, Quarterly = 4, Half yearly = 2, Annually = 1, daily = 365)
t = time period in years
Example of Compound interest calculation
Ms.Vaahini would like to save a total of ₹500000 after five years. She has an amount of ₹100,000 rupees for the initial depositions. The interest rate is 5% annually. She wants to calculate how much she has to invest monthly in those five years to achieve her savings goal.
A = ₹500,000
P = ₹100,000
r = 5% = 0.05
n = 12
t = 5
500000 = [100000x(1+(0.05/12))^(5×12)] + [(12/12) x (Q)x(((1+(0.05/12))^(5×12))-1)/(0.05/12)]
500000 = [100000x(1.28335868)] + [(1 x Qx(68.00608284)]
[Q x68.00608] = 500000 – [128335.86]
Q = 371664.14/68.00608
Q = 5365.16
Vahini needs to invest ₹5365 rupees each month for 5 years to have a savings goal of ₹500000 rupees.
Check this in the above calculator.
Do you want to calculate the compound interest? check it here.
Here is the list of all calculators that we provide for free.
