What is the use of a savings calculator?
Essentially, a savings calculator is useful especially when we wish to have an idea as to how much will be the investment growth over the period of time. And this would further help you in saving the money accordingly. In addition to this, one would be able to get to know as to what will be the interest on the IRA besides getting a chance to calculate the certificate deposit growth apart from understanding the simple fact as to how much time it is going to take to save the amount.
In addition to this, one shall be in a position to not only set the goal but also find out as to how much amount is to be saved every month. An individual can also learn more about the complete procedure of using the savings calculator here.
How to use a savings calculator?
The steps to use a savings calculator are very easy to understand & everyone has to remember one that this savings calculator has some fields which have to be filled completely in order to get the result. In the 1st field, one will be able to find the field marked as the starting deposit, you can either use the slider or enter the amount. In the next field, the amount is to be entered for the regular deposit, it can be done either by using a slider or by typing the amount.
Users will also have to then select the deposit as well as the interest frequency which is further followed by the interest rate or the rate of interest. In the following field, one will come across the savings term which can be either typed or entered using the slider. Finally click on calculate the get the result displayed on the screen.
Savings calculator formula
In order to get to know as to what is the formula to calculate salary, an individual would be required to make use of the compound interest formula & the same has been mentioned below –
\(FV=PV \quad \times \quad (1\quad + \quad i)^n\)
In the above formula, FV denotes the future value of the investment whereas PV states the present value of investment. On the one hand, where i represents rate of interest or the interest rate (which is earned every month [or every year or for that matter quarterly]); while on the other hand, number of periods are denoted by the letter n.
People prefer compounding interest because it is quite an advantage when compared to the rest of the things. In addition to this, with compound interest one can be rest assured of earning more wealth over a period of time. Therefore, many people have suggested that with compound interest, it is the best way to build wealth with time. And thus, it helps when the savings calculator is in question. All the users will have to do is follow the steps listed above to get to use the savings calculator as it is quite an easy tool to be used.