Savings Boost Calculator

How to calculate savings growth?

Savings growth is calculated using the future value of an ordinary annuity formula. This mathematical approach factors in your recurring contributions along with the power of compound interest, where your earnings generate their own earnings over time.

Formula: FV = P × [((1 + r)^n - 1) / r]

Using the calculator: an example

Example: A $100 monthly increase over 20 years at 7% annual return can result in significantly higher long-term wealth than sticking with the base contribution amount.

Step-by-step calculation:

1. Convert annual rate to monthly
2. Apply the future value formula
3. Compare results to the original plan

Frequently Asked Questions

Why does a small increase matter?

Compounding works best over time. Even a small monthly addition grows exponentially as the returns themselves start earning more money. Over decades, this creates a massive difference in your final balance.

Should I increase contributions or seek higher returns?

While higher returns are great, they involve higher risk. Increasing your contribution is a guaranteed way to build capital. Consistency often outweighs the impact of market volatility in the long run.