How to Calculate a Monthly Savings Account Balance With Regular Deposits
Many people use savings accounts as a place to safely keep money in case of a rainy day or other financial emergency. To help build the account balance, you may commit to putting in a specific amount each money. Taking into account your beginning balance, the amount you choose to put in each money and the interest rate, you can calculate approximately how much your savings account will be worth after a specified period of time.
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Instructions
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1
Add 1 to the monthly savings account interest rate. If you only have the annual interest rate, divide it by 12 to find the monthly rate. For example, if your monthly rate equals 0.0028 percent, add 1 to get 1.0028.
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2
Raise the Step 1 result to the Mth power, where M equals number of months over which you will make contributions. In this example, if you plan to make the monthly contributions for 84 months, raise 1.0028 to the 84th power to get 1.264746028.
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3
Multiply the Step 2 result by the initial balance of the savings account. In this example, if you start with $1,100 in your account, multiply 1.264746028 by $1,100 to get $1391.22063.
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4
Divide the amount you add each monthly contribution by the monthly interest rate. In this example, if you add $90 each month, divide $90 by 0.0028 to get 32,142.85714.
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5
Subtract 1 from the Step 2 result. In this example, subtract 1 from 1.264746028 to get 0.264746028.
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Multiply the Step 4 result by the Step 5 result. In this example, multiply 0.264746028 by $321,42.85714 to get $8,509.693746.
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Add the Step 6 result to the Step 3 result to find your savings account balance after the specified period of time. Completing this example, add $1,391.22063 to $8509.693746 to find your savings account will be worth $9,900.91.
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