From an initial principal and a fixed monthly contribution, compute the future savings value, principal contributed, and interest earned with compounding.
Input Data
Results
At a glance:A savings plan compounds the initial principal and monthly contributions; the future value combines both plus accumulated interest.
Formula
futureValue = principal·(1+r)^n + monthlyContribution·((1+r)^n − 1)/r (r = annualRate/12, n = years×12)
totalContributed = principal + monthlyContribution×years×12
totalInterest = futureValue − totalContributed
$$FV = P (1+r)^n + \text{PMT} \times \dfrac{(1+r)^n - 1}{r}$$$$r = \dfrac{\text{Annual Rate}}{12}, \quad n = 12 \times \text{Years}$$How to Use
- Enter the initial principal and monthly contribution.
- Enter the annual rate and term.
- Review the future value, principal, and interest.
FAQ
Does this assume contributions at the start or end of the month?
It uses the ordinary (end-of-period) annuity assumption — each contribution is treated as deposited at month end. With start-of-month (annuity due) contributions the result is slightly higher because each payment earns one extra month of interest.
What happens if the rate is zero?
With no compounding, the future value is simply the initial principal plus the sum of all contributions, and interest earned is zero. The total is then exactly the cash you put in.
Is the return guaranteed?
No. The result uses a fixed rate; real investment returns fluctuate. Treat it as an estimate and comparison tool, keep diversification, and hold for the long term.
Why does a longer term make such a big difference — how does compounding work?
Compounding is exponential, not linear. With principal 10,000, monthly 3,000 at 5%, 10 years yields about HK$482,317 but 20 years jumps to about HK$1,260,227 — doubling the years more than doubles the value. Interest is reinvested and itself earns interest, so later years contribute far more than earlier ones; by year 20 interest is about 42% of the total. Start early and hold long; this calculator uses a fixed rate and ignores inflation and fees.
How is a savings plan related to a sinking fund and SIP?
They share the same 'regular contribution + compounding' annuity model but answer different questions. The Savings Plan Calculator is forward-looking: given contributions, rate, term, it shows the final value (plus it includes an initial principal). The Sinking Fund Calculator is the inverse: given a target amount and term, it finds the required periodic deposit. SIP is the same discipline applied to volatile investments with dollar-cost averaging. So: savings plan shows 'how much you'll have', sinking fund shows 'how much to save', SIP applies the discipline to investing.
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.