Savings Calculator







Formula

The formula to calculate the initial deposit required to accumulate a certain future value with compound interest is:

\[ \text{Amount} = P \left(1 + \frac{r}{n}\right)^{nt} \]

Where:

Example Calculation

Assuming you want to accumulate $5000 in 7 years with an annual interest rate of 5%, you would use the formula as follows:

\[ 5000 = P \left(1 + \frac{0.05}{1}\right)^{1 \times 7} \]

Rearranging to solve for \( P \):

\[ P = \frac{5000}{\left(1 + 0.05\right)^7} \]

So, the initial deposit \( P \) is:

\[ P = \frac{5000}{1.05^7} \approx 3553.41 \]

Therefore, you need to deposit approximately $3553.41 to accumulate $5000 in 7 years with a 5% annual interest rate.