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Savings Rate for a Target
Determines the regular savings rate that leads to a desired final wealth – with or without starting capital.
Type values, assign them with the value keys and press "Solve". It is the same financial calculator as under "Calculator" in the menu above.
Examples for this calculator
Each example is a story with explanation and a "what you learn" takeaway.
Formula
R = (FV − K0·q^n) / ((q^n − 1)/(q − 1))
How the formula works
Here the final-value formula is solved for the rate: you divide the target by the compounding factor (qⁿ−1)/(q−1), which shows the multiple to which a rate of $1 grows. Takeaway: the longer n, the larger this factor – and the smaller the rate needed.
Solving the annuity final-value formula for the rate.
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