Savings
With the Savings calculation you can find out how long it will take to reach a savings goal when making periodic deposits.
FinKit assumes that at least one full deposit will be made and that deposits are made at the beginning of each period.
At the end of each period interest is calculated and FinKit checks if the savings goal has been reached:
| • | if it is then there's no need to make an additional deposit |
| • | if making a smaller deposit would reach the goal, this smaller deposit concludes the series |
| • | when at least one more full deposit is needed, an additional deposit is taken into account |
If the savings goal hasn't been reached at the end of the maximum number of periods for the given payment frequency, a question mark ("?") will be displayed for the results.
To view the amortization schedule, select the Show Details command in the Calculation menu.
To toggle between date and year/period view, click the header of the first details column.
To change the start date, select the Start Date command in the Edit menu to open the Date Options dialog.
Input
| • nominal annual rate | |
| • compounding frequency | |
| • payment frequency | |
| • current balance | |
| • periodic deposit | |
| • savings goal or fixed number of payments |
Results
| • number of periods needed to reach the savings goal |
| • effective periodic rate |
| • total paid |
| • total interest |
Example
| • | You have $25,000 in your savings account. Your expected average annual rate of return is 4 %. How many $750 monthly deposits will you have to make to become a millionnaire?
Answer: It will take you 482 months or 482 / 12 = 40,17 years. If you haven't registered FinKit by then please do so! |
Related topics
| Nominal annual rate |
| Compound interest |