Calculate how your savings can grow over time with regular contributions and compound interest.
Your total savings will be displayed here.
Understanding the Savings Growth Calculator
This calculator helps you visualize the power of compound interest and consistent saving. By inputting your initial deposit, regular annual contributions, an assumed interest rate, and the number of years you plan to save, it estimates your future savings balance.
How it Works: The Math Behind the Growth
The calculation is based on compound interest and future value of an annuity. Here's a breakdown:
Initial Deposit Growth: The initial deposit grows with compound interest over the specified number of years. The formula for this is:
FV = P * (1 + r)^n
Where:
FV is the Future Value of the initial deposit.
P is the Principal amount (Initial Deposit).
r is the annual interest rate (as a decimal).
n is the number of years.
Future Value of Annuity (Contributions): Each annual contribution also grows with compound interest. Since contributions are made periodically (annually in this simplified model), we use the future value of an ordinary annuity formula:
FVA = C * [((1 + r)^n - 1) / r]
Where:
FVA is the Future Value of the Annuity (contributions).
C is the Annual Contribution amount.
r is the annual interest rate (as a decimal).
n is the number of years.
*Note: If the interest rate r is 0, the FVA is simply C * n.*
Total Savings: The total projected savings is the sum of the future value of the initial deposit and the future value of all the annual contributions.
Total Savings = FV (from initial deposit) + FVA (from contributions)
Key Factors Influencing Savings Growth:
Time: The longer your money is invested, the more it can grow due to compounding.
Interest Rate: Higher interest rates lead to faster growth, but often come with higher risk.
Contribution Amount: Regularly adding to your savings significantly boosts the final amount.
Starting Amount: A larger initial deposit provides a stronger base for compounding.
Use Cases:
Planning for retirement.
Saving for a down payment on a house.
Estimating the growth of an emergency fund.
Setting and tracking financial goals.
Understanding the impact of different savings strategies.
This calculator provides an estimate and does not account for taxes, fees, or variations in interest rates. It's a powerful tool for financial planning and motivation.
function calculateSavings() {
var initialDeposit = parseFloat(document.getElementById("initialDeposit").value);
var annualContribution = parseFloat(document.getElementById("annualContribution").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var years = parseInt(document.getElementById("years").value);
var resultElement = document.getElementById("result");
// Validate inputs
if (isNaN(initialDeposit) || initialDeposit < 0 ||
isNaN(annualContribution) || annualContribution < 0 ||
isNaN(interestRate) || interestRate 100 ||
isNaN(years) || years 0) {
futureValueOfContributions = annualContribution * (Math.pow((1 + rateDecimal), years) – 1) / rateDecimal;
} else {
// If interest rate is 0, contributions just add up
futureValueOfContributions = annualContribution * years;
}
totalSavings = futureValueOfInitialDeposit + futureValueOfContributions;
// Display result
resultElement.innerHTML = "$" + totalSavings.toFixed(2);
}