## Compound Savings Calculator

Individuals who are employed try to save the funds after their expenditure and necessary requirements, and the residual if invested with compounding magic then what figure will be after a couple of periods is calculated by this compound savings calculator.

#### Compound Savings Calculator

A * ( 1 + i )^{n*F} + I * ( ( 1 + i )^{n*F}– 1 / i )

- A is the initial Principal.
- i is the interest rate.
- n is the number of periods for which investment is to be made.
- F is the number of compounding period which could be daily, annually, semi-annually, monthly or quarterly.
- I is the regular savings fixed amount.

### About Compound Savings Calculator

The formula for calculating Compound InterestCalculating Compound InterestCompound interest is the interest charged on the sum of the principal amount and the total interest amassed on it so far. It plays a crucial role in generating higher rewards from an investment.read more is:

**Compound Interest =**

**A * ( 1 + i )**

^{n*F }+ I * ( ( 1 + i )^{n*F}– 1 / i )Where,

- A is the initial Principal
- i is the interest rate
- F is the number of compoundingCompoundingCompounding is a method of investing in which the income generated by an investment is reinvested, and the new principal amount is increased by the amount of income reinvested. Depending on the time period of deposit, interest is added to the principal amount.read more period which could be daily, annually, semi-annually, monthly or quarterly.
- n is the number of periods for which investment is to be made.
- I is the regular savings fixed amount.

This calculator calculates the amount to be received at maturity when the individual saves a certain amount and invests a fixed amount periodically. There could be products that pay interest annually, monthly, quarterly, or semi-annually, and accordingly, this calculator will calculate the maturity amount that shall be received by the individual at the time of maturity. In this way, an individual will come to know about the amount he shall receive from the amount that he has saved. If the individual is making a comparison between various products, then he can use this calculator to identify which one is paying better.

### How to Calculate Using Compound Savings Calculator?

One needs to follow the below steps in order to calculate the amount for Retirement.

**Step #1 –** First of all, calculate the monthly savings which an individual can make.

**Step #2 – **Determine the rate of interest that can be applied to the investment.

**Step #3 – **Now, Compound the initial amount either monthly, quarterly, semi-annually, or annually by the rate of interest until the maturity period as the case may be.

**Step #4 – **We now need to determine the future value of the monthly savings amount with the same rate of interest that was used to calculate the maturity value of an initial investment.

**Step #5 – **Now, we can take a total of values arrived on step 3 and step 4, which shall be the future value of the savings invested.

### Example #1

Kushal has been working with a startup company and has been earning quite well. Recently Mr. Kushal had opened an account wherein he has initially deposited $4,000, and he intends to save monthly $100 and deposit in this account. This account pays a 1.25% rate of interest which is compounded monthlyInterest Which Is Compounded MonthlyMonthly compound interest refers to the compounding of interest every month, which implies that the compounding interest is charged both on the principal and the accumulated interest.read more. He intends to retain the same amount of savings until 20 years. Based on the given information, you are required to calculate the amount to be received at maturity.

**Solution:**

The following information is given wherein A is 4,000, and Interest Rate is 1.25% that has to be divided by 12 that will be 0.10%, frequency is 12, and n is 20 as it’s compounding monthly.

The formula for calculating Compound Interests is:

**Compound Interest = A * ( 1 + i )**

^{n*F }+ I * ( ( 1 + i )^{n*F}– 1 )/ i- = $4,000 *( 1 + 0.10% )
^{20*12}+ $100 *((1 + 0.10% )^{20*12}– 1) / 0.10% **= $32,385.84**

The income earned on this product will be $32,385.84 less (4000 + ( 100 * 12* 20 )) which is $32,385.84 less $28,000 which is $4,385.84

### Example #2

Booker has started saving $1200 per quarter and intends to invest the amount in an account which shall pay the rate of interest 3% per annum compounded quarterly. He intends to invest for 10 years.

Based on the given information, you are required to calculate the amount to be received at maturity.

**Solution:**

The following information is given that is A is 0, Interest Rate will be interesting is 3.00%, which, when divided by 4, will yield us 0.75%, frequency is 4, and n is 10 as its compounding quarterlyCompounding QuarterlyThe compounding quarterly formula depicts the total interest an investor can earn on investment or financial product if the interest is payable quarterly and reinvested in the scheme. It considers the principal amount, quarterly compounded rate of interest and the number of periods for computation.read more.

Here Mr. Booker saves $1200 per quarter

The formula for calculating compound interests is:

**Compound Interest = A * ( 1 + i )**

^{n*F}+ I * ( ( 1 + i )^{n*F}– 1)/ i )- = 0 * ( 1 + 0.75% )
^{10*4}+ $1200 * ( (1 + 0.75% )^{10*4}– 1) /0.75% **= 55,735.78**

The income earned on this product will be $ 55,735.78 less ( 1200 * 4 * 10 ) which is $55,735.78 less $48,000 which is $7,735.78.

### Conclusion

A compound savings calculator can be used to calculate the maturity amount of the savings that have been invested by the individual, and he can know from same, how much he would be making in the future, assuming he doesn’t withdraw any amount and would be able to decide if it meets the goal or he needs to invest more or further can reduce the same.

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