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Savings Goal Calculator
Required Savings Plan
Savings Analysis
This plan ensures you reach your **target savings goal** by the deadline, leveraging **compound interest**.
Planning Your Financial Future with the Savings Goal Calculator
The **Savings Goal Calculator** is a powerful **financial planning** tool that helps reverse-engineer your required contribution. Instead of guessing, you define your **target savings goal** (the future value) and the timeline, and the calculator determines the exact **monthly contribution** needed. This is crucial for planning major purchases, education funds, or simply building a robust emergency fund.
The Savings Goal Formula (Solving for Annuity Payment)
This calculator uses the Future Value of an Annuity formula, solved for the Periodic Payment ($\text{PMT}$). The calculation is complex because it must account for the future growth of both the **initial savings** and every single **monthly contribution** you make, all while factoring in the power of **compound interest**.
The core principle is ensuring that the future value of your initial deposit plus the future value of your annuity payments equals your **goal amount**.
A higher interest rate or a longer time horizon significantly reduces the required **monthly contribution**.
Savings Goal FAQs
If the **interest rate** is $0\%$, the **Savings Goal Calculator** will perform a simple calculation: it will subtract your **initial savings** from the **target savings goal** and divide the remainder by the **time in months**. This gives you the required **monthly contribution** assuming no **compound interest** is earned.
The **Total Interest Earned** is the difference between your **target savings goal** and the sum of all your **monthly contributions** plus your **initial savings**. It represents the passive income your money generated through **compound interest** over the **time to goal**.
The **Compound Interest Calculator** calculates the future value if you know the **monthly contribution**. The **Savings Goal Calculator** works in reverse: it calculates the required **monthly contribution** when you know the desired **future value** (**target savings goal**).