Savings Accumulation Calculator

Building your savings over time can be a powerful way to achieve your financial goals. Our Savings Accumulation Calculator helps you project your future savings by factoring in your initial savings, monthly contributions, annual interest rate, and investment period.

Whether you’re saving for retirement, a home, or a big trip, this tool provides a clear picture of how much you can expect to accumulate.

Formulas and Calculations

1. Monthly Interest Rate

First, convert the annual interest rate into a monthly rate:

$\text{Monthly Rate}=\frac{\text{Annual Interest Rate}}{100\times 12}$

2. Number of Periods (Months)

Convert the investment period into months:

$\text{Months}=\text{Years}\times 12$

3. Future Value of Initial Savings

Grow the initial savings over the investment period:

$\text{Future Value of Initial Savings}=\text{Initial Savings}\times (1+\text{Monthly Rate}{)}^{\text{Months}}$

4. Future Value of Monthly Contributions

Grow the series of monthly contributions over time:

$\text{Future Value of Contributions}=\text{Monthly Contribution}\times \frac{(1+\text{Monthly Rate}{)}^{\text{Months}}-1}{\text{Monthly Rate}}$

5. Total Future Value

Add the future value of initial savings and contributions:

$\text{Future Value}=\text{Future Value of Initial Savings}+\text{Future Value of Contributions}$

6. Total Contributions

Sum of all deposits made during the savings period:

$\text{Total Contributions}=\text{Initial Savings}+(\text{Monthly Contribution}\times \text{Months})$

Example Calculation

Let’s work through an example:

• Initial Savings = $5,000
• Monthly Contribution = $200
• Annual Interest Rate = 6%
• Investment Period = 10 years

Step 1: Monthly Interest Rate

$\text{Monthly Rate}=\frac{6}{100\times 12}=0.005$

Step 2: Number of Months

$\text{Months}=10\times 12=120$

Step 3: Future Value of Initial Savings

$\text{Future Value of Initial Savings}=5000\times (1+0.005{)}^{120}=5000\times 1.8194=9097$

Step 4: Future Value of Contributions

$\text{Future Value of Contributions}=200\times \frac{(1+0.005{)}^{120}-1}{0.005}=200\times 265.26=53,052$

Step 5: Total Future Value

$\text{Future Value}=9097+53052=62149$

Step 6: Total Contributions

$\text{Total Contributions}=5000+(200\times 120)=29000$

Final Result:

• Future Value: $62,149
• Total Contributions: $29,000
• Interest Earned: $33,149

This example shows how regular monthly savings combined with compound interest can significantly grow your investment over time.