Savings Calculator With Regular Deposits/Withdrawals

Savings Growth Formula:

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

Principal (P):

Annual Interest Rate (R):

decimal

Compounding Frequency (n):

Time (T):

years

Deposit Amount (C):

Withdrawal Amount (W):

Final Amount (A):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Savings Growth Formula?

The savings growth formula calculates the future value of an investment with regular deposits and withdrawals, taking into account compound interest. It provides a comprehensive way to project savings growth over time.

2. How Does the Calculator Work?

The calculator uses the savings growth formula:

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

Where:

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

Explanation: The formula calculates compound growth of the principal plus the future value of regular deposits minus the future value of regular withdrawals.

3. Importance of Savings Calculation

Details: Accurate savings projection is crucial for financial planning, retirement planning, and achieving long-term financial goals. It helps individuals understand how regular contributions and compound interest can grow their savings over time.

4. Using the Calculator

Tips: Enter principal amount in dollars, annual interest rate as a decimal (e.g., 0.05 for 5%), compounding frequency (number of times interest is compounded per year), time in years, and regular deposit/withdrawal amounts in dollars. All values must be valid non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if the interest rate is zero?
A: The formula simplifies to A = P + C × n × T - W × n × T, as there is no compound growth.

Q2: How does compounding frequency affect results?
A: Higher compounding frequencies result in slightly higher final amounts due to more frequent interest compounding.

Q3: Can deposits and withdrawals be different amounts?
A: This calculator assumes regular, consistent deposit and withdrawal amounts. For variable amounts, more complex calculations are needed.

Q4: Are taxes considered in this calculation?
A: No, this calculation does not account for taxes. For accurate financial planning, tax implications should be considered separately.

Q5: What time period should I use for long-term planning?
A: For retirement planning, typical time horizons are 20-40 years. For shorter-term goals, use appropriate time periods.