Compound Interest Formula With Monthly Deposits: Computations And Calculators

Do you want to have an investment wherein the interest gains interest and so on

? Therefore, a savings account with a compound interest principle is the thing for you! Through using a compound interest formula, you will be able to see how your money grows in the account. What more if you will deposit money in a monthly manner? For this investment, it is best to use the compound interest formula with monthly deposits.

Here, is a good example of a compound interest formula with monthly deposits:

The Compound Interest Formula With Monthly Deposits

Accruing Principal Amount Formula: FV = ( (1 + i)^n ) * PV

Future Value of The Savings Account: FV = PMT * ( ( (1 + i)^n - 1) / i )

Wherein the following are:

FV for Future Value

PV for Present Value

PMT for Periodic Payment Amount

i for interest rate per period

n for number of periods

The compound interest scenario:

For six months, you religiously deposited an amount of a hundred dollars to your savings account every month. The account has a 2% monthly rate of interest.

FV = ?

PV = 0

PMT = $100

i = 2%

n = 12 per year

The result:

The future value in only six months is a whopping $630.81!!!

How about using the compound interest formula with monthly deposits on a loan?

If you are thinking about using a hefty sum of money to get an automobile or a house, then it is best to know more than just stock knowledge. It may come to your mind that borrowing money or getting a loan would make life easier for you when buying something expensive. However, you have to consider the monthly dues to need to make in a loan. One should first be sure that they can make the monthly payments before diving into any debt. Another convenient option is finding the best loan that you will have no money or deal problems. This is where the compound interest formula with monthly deposits comes in handy. The compound interest formula with monthly deposits will tell you the amounts to be paid every month. Not only that, the compound interest formula with monthly deposits can help ins making a decision on what loan deal you should take.

Do the computations with the compound interest formula with monthly deposits scare you?

Then, fret not! Today, we have calculators especially designed for the compound interest formula with monthly deposits. These calculators come in basic to complex types. They can give you a straightforward answer on the monthly payments you need to make. The complex ones can even give you timeframes and schedules for the payments. All you have to do is make some researching for the best one for you! They come in for free most of the time, but for the complex calculators, which use the compound interest formula with monthly deposits, you need to make a small payment in order to download them. Bur, if you want to get into the process, it is best to use the compound interest formula with monthly deposits than the calculators. Both are created to make use in both savings and loan; therefore, use it well and never forget to share!

by: William Ava

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