Savings Goal
Setting a savings goal is a powerful way to secure your financial future. Whether you're saving for a major purchase, retirement, or any other goal, having a target amount helps you stay on track. This Savings Goal Calculator will guide you in calculating the amount you need to save monthly to reach your target, factoring in compound interest over time.
By entering your goal amount, initial savings, annual interest rate, and desired timeframe, the calculator will show you the suggested monthly contribution required to achieve your goal. The calculator also accounts for interest earned on your savings, helping you reach your target faster with the power of compounding.
Field Explanations
Input
-
Goal Amount ($): The amount you wish to save by the end of the timeframe.
-
Initial Balance ($): The amount you currently have saved or invested.
-
Annual Interest Rate (%): The expected annual interest rate or return on your savings.
-
Growth Timeframe (Years): The number of years over which you plan to achieve your savings goal.
Output:
-
Suggested Monthly Contribution: This is the monthly amount you need to contribute to reach your goal, taking into account your initial balance, annual interest rate, and timeframe.
How the Calculator Works
The formula used to calculate the suggested contribution to reach your savings goal is based on the future value of an investment with regular contributions, considering both the initial balance, the interest rate, and the timeframe.
The Formula:
Where:
-
FV = Future Value (Your target savings goal)
-
P = Initial Balance (the amount you have saved already)
-
r = Annual Interest Rate (as a decimal, e.g., 5% becomes 0.05)
-
n = Number of times interest is compounded per year (typically 12 for monthly or 1 for annually)
-
t = Time in years (how long you want to save)
-
C = Contribution (the regular amount you need to save, calculated by the calculator)
Subscribe TO OUR NEWSLETTER
Subscribe for valuable financial insights and expert tips delivered straight to your inbox.
Latest Articles
