Savings
calculator
If you are saving with a particular goal in
mind, a savings calculator will let you find out the amount
of money you need to set aside every month based on the rate
of interest that your savings will earn.
 Usually
a savings calculator will need you to input how much your
goal is, the length of time you have to set aside money, and
the rate of interest that your money will be earning.
So, if your goal is to have £6,000 in
savings within two years, a savings calculator will tell you
how much you need to put away every month. Now if your savings
scheme just involves the space under your mattress, you don’t
need a savings calculator to know that £250 a month
for two years will add up to £6,000. But if your money
is earning interest in a savings account, a savings calculator
will show you how much less you can set aside for savings
each month to arrive at the same goal in the same amount of
time.
For example, if your savings earned a rate
of interest of 5%, that translates to £247.58 each month
over two years to save £6,000. An interest of 7% would
mean that you only need £242.80 each month.
| Rate
of Interest |
Amount
Saved Per Month |
| 0% |
£
250.00 |
| 5% |
£
247.58 |
| 7% |
£
242.80 |
Many savings calculators can be found online,
usually at bank and building society web sites.
|
