Savings Interest Calculator

Initial Deposit ($):

Annual Interest Rate (%):

Years to Save:

Monthly Contribution ($):

Description

The Savings Interest Calculator helps you estimate the future value of your savings by calculating compound interest over a specified period. By inputting your initial deposit, interest rate, and monthly contributions, you can see how much your savings will grow over time, allowing you to plan for financial goals.

How to Use

Enter your initial deposit in the "Initial Deposit" field.
Enter the annual interest rate in the "Annual Interest Rate" field.
Enter the number of years you plan to save in the "Years to Save" field.
Enter your monthly contribution in the "Monthly Contribution" field.
Click the "Calculate Savings" button to see the future value of your savings, including interest earned.

How to Calculate Savings Interest Manually

To manually calculate savings interest, follow these steps:

Convert the annual interest rate to a monthly rate by dividing it by 12: monthly rate = annual rate / 12.
Use the compound interest formula to calculate the future value of the initial deposit: FV = P(1 + r)^n, where P is the initial deposit, r is the monthly rate, and n is the total number of months.
Calculate the future value of the monthly contributions using the future value of an annuity formula: FV = C[((1 + r)^n - 1) / r], where C is the monthly contribution.
Add the future values from both calculations to get the total savings.
Example: With an initial deposit of $1,000, an annual interest rate of 5%, a monthly contribution of $100, and a saving period of 5 years:
- Monthly rate = 5% / 12 = 0.4167%
- Total months = 5 * 12 = 60
- Future value of initial deposit = $1,000(1 + 0.004167)^60 ≈ $1,283.68
- Future value of monthly contributions = $100[((1 + 0.004167)^60 - 1) / 0.004167] ≈ $6,977.90
- Total savings = $1,283.68 + $6,977.90 ≈ $8,261.58