To use this calculator, enter your initial deposit, monthly contribution, the number of years you plan to save, the interest rate, and the compounding frequency. The calculator will then provide the future value of your savings, total contributions, and total interest earned.
The formula used is: A = P(1 + r/n)^(nt) + PMT * [((1 + r/n)^(nt) - 1) / (r/n)], where A is the future value, P is the initial deposit, r is the annual interest rate, n is the number of times interest is compounded per year, t is the number of years, and PMT is the monthly contribution.
Suppose you start with an initial deposit of $5,000, contribute $200 monthly, with an annual interest rate of 2%, compounded monthly, over 5 years. The calculator will show your future savings value, total contributions, and interest earned.
Remember that interest rates can change, affecting your savings growth. Also, consider any fees associated with the savings account that might impact your total savings.
Explore other calculators like the Compound Interest Calculator and the Investment Calculator for more financial planning tools.