Interest Calculator On Regular Savings

Compound Interest Formula with Regular Deposits:

\[ A = P \times (1 + R / n)^{(n \times T)} + C \times \frac{(1 + R / n)^{(n \times T)} - 1}{R / n} \]

Principal (P):

Annual Interest Rate (R):

Compounding Frequency (n):

Time (T):

years

Regular Deposit (C):

Final Amount (A):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Compound Interest Formula with Regular Deposits?

The compound interest formula with regular deposits calculates the future value of an investment that earns compound interest while receiving regular additional contributions. It combines the power of compound interest with the discipline of regular savings.

2. How Does the Calculator Work?

The calculator uses the compound interest formula with regular deposits:

\[ A = P \times (1 + R / n)^{(n \times T)} + C \times \frac{(1 + R / n)^{(n \times T)} - 1}{R / n} \]

Where:

$ A $ — Final amount ($)
$ P $ — Initial principal ($)
$ R $ — Annual interest rate (decimal)
$ n $ — Compounding frequency per year
$ T $ — Time in years
$ C $ — Regular deposit amount ($)

Explanation: The formula calculates the compound growth of the initial principal plus the future value of a series of regular deposits.

3. Importance of Regular Savings Calculation

Details: Understanding how regular savings grow with compound interest helps in financial planning, retirement savings, and achieving long-term financial goals. It demonstrates the power of consistent investing over time.

4. Using the Calculator

Tips: Enter the initial principal amount, annual interest rate as a percentage, select compounding frequency, enter time in years, and specify the regular deposit amount. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: How does compounding frequency affect the final amount?
A: More frequent compounding (e.g., monthly vs annually) results in higher returns due to interest being calculated and added more often.

Q2: What's the difference between this and simple compound interest?
A: This formula includes regular additional deposits, while simple compound interest only considers growth of the initial principal.

Q3: Can I use this for retirement planning?
A: Yes, this calculator is excellent for estimating retirement savings growth with regular contributions.

Q4: What if I make deposits at different intervals than compounding?
A: The formula assumes deposits are made at the same frequency as compounding. For different frequencies, more complex calculations are needed.

Q5: Are taxes considered in this calculation?
A: No, this is a pre-tax calculation. Actual returns may be lower after accounting for taxes on investment earnings.