Personal finance
Savings goal calculator
Start from the amount you want to reach and find out how much to pay in each time — or how long it will take with the amount you can manage to set aside.
When to use this calculation
A compound interest calculator answers the question "what will this capital grow to". This one turns it around: it starts from the result you want and works back to the monthly effort needed to get there. It is the calculation behind any savings plan — the deposit on a house, the car to be replaced in three years, the emergency buffer of six months' expenses.
The formula adds two components. The capital you already have grows on its own, C₀ × (1 + i)ⁿ, and whatever is still missing has to be covered by the contributions, which form an annuity: R × ((1 + i)ⁿ − 1) / i. Isolating R gives the amount to set aside. If you choose contributions in advance — at the start of the period rather than the end — every payment stays invested one period longer and the required amount falls slightly.
The rate needs care. A 3% annual return does not become 0.25% a month by dividing by twelve: compounding 0.25% twelve times would reach 3.04%. The correct conversion is the compound one, (1 + 3%)^(1/12) − 1 = 0.2466% a month, and that is what this calculator applies. Over three years the difference is a few euros; over twenty it becomes material.
A worked example: a €10,000 target, no starting capital, a 3% annual return, monthly contributions in arrears over 3 years. You need €265.97 a month: €9,574.94 paid in from your own pocket and €425.06 of interest. If you start with €2,000 already saved, the amount drops to €213.68 a month, because those €2,000 grow to €2,185.45 on their own in the meantime.
Common mistakes
- Dividing the annual rate by twelve instead of converting it by compound equivalence: the result overstates the return and makes the target look closer than it is.
- Using the gross return and forgetting tax on investment gains, account duty and fees: they weigh on the net result more than they appear to over long horizons.
- Ignoring inflation: €10,000 in ten years will not buy what it buys today, and a target expressed in real spending should be raised accordingly.
- Applying a high equity return to a two- or three-year goal: over short horizons market variability makes the final amount anything but guaranteed.
- Forgetting that the calculated amount assumes regular contributions: skipping a few pushes the target further out than intuition suggests, because of the interest not earned.
Frequently asked questions
How much do I need to save each month to have €10,000 in 3 years?
With no interest you need €277.78 a month (10,000 divided by 36). With a 3% annual return it drops to €265.97, because interest contributes around €425. If you already have some capital saved, the monthly amount falls further.
What is the difference between contributions in advance and in arrears?
A contribution in advance is paid at the start of the period and earns interest for one period more; one in arrears is paid at the end. For the same target the amount needed in advance is slightly lower, by exactly a factor of (1 + i).
What return should I enter?
The net effective annual rate you expect from wherever the money is held: a fixed-term deposit states it explicitly, while for a fund or an ETF you should use a cautious estimate. If the money sits in a current account paying nothing, leave it at 0.
Does the calculation account for inflation?
No, it works in nominal terms. To think in purchasing power, enter the real return — the expected return minus expected inflation: the result is then the amount to set aside to reach a target expressed in today's money.
Can I work out how long it will take instead of the amount?
Yes — change the "What do you want to work out" setting: you enter what you can pay in each time and the calculator returns the number of contributions and the years needed to reach the target.
How this calculation works
The target is reached when M = C₀ × (1 + i)ⁿ + R × ((1 + i)ⁿ − 1) / i, where C₀ is the starting capital, R the regular contribution, n the number of contributions and i the period rate. For contributions in advance the second term is multiplied by (1 + i). Isolating R gives the amount required; isolating n with a logarithm gives the time required. The period rate comes from the annual one by compound equivalence: i = (1 + annual rate)^(1/periods per year) − 1.
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