A Savings Plan calculator is a simple tool that allows individuals to get an idea of the returns on their investments made through Savings Plan. Savings Plan investments have become one of the most popular investment options for millennials lately.
These Savings Plan calculators are designed to give potential investors an estimate on their mutual fund investments. However, the actual returns offered by an investment varies depending on various factors. The Savings Plan calculators does not provide clarification for the exit load and total expense ratio (if any). This calculator will calculate the wealth gain and expected returns for your Savings Plan investment.
Savings Plan calculators work by using the inputs provided by the user (the amount of investment, the frequency of investment, and the expected rate of return) to calculate the maturity value of the investment.
Typically, an Savings Plan calculator has several input fields where the user can enter the following information:
Once the user enters this information and presses, the Savings Plan calculator uses the inputs provided to perform calculations and generate the maturity value of the investment. The maturity value is the final value of the instrument at the end of the investment period.
The formula used by Savings Plan calculators to calculate the maturity value of an investment is based on the concept of compound interest. The formula is as follows:
MV = P [((1 + r)^n – 1) / r]
Where:
| MV : Maturity Value (the final value of the investment at the end of the investment period) |
| P : Principal (the initial amount of investment) |
| r : Rate of return (expressed as a decimal) |
| n : Number of compounding periods (based on the frequency of investment) |
The formula uses the principal (P) and the expected rate of return (r) to calculate the future value of the investment after the number of compounding periods (n) have passed. The compounding periods are based on the frequency of investment (e.g. monthly, quarterly, etc.).
To calculate the maturity value, the Savings Plan calculator uses this formula with the inputs provided by the user (amount of investment, frequency of investment, expected rate of return, and the number of years for which the investment is made).
Yes, you can anytime check your returns with Savings Plan investment calculator and increase or decrease the Savings Plan amount
No, you calculate any investments with this calculator. Exp. ETFs, Stocks, Cryptos etc.
