Method
Each month the balance earns (annual rate / 100 / 12) and the monthly contribution is added, repeating until the balance reaches the target amount (up to 1,200 months). Time to goal is that number of months.
Gap today = target amount - current savings (never below zero).
Worked example
| Target amount | $50,000 |
|---|---|
| Current savings | $5,000 |
| Monthly contribution | $650 |
| Annual rate | 4.5% |
| Time to goal | 5y 1m |
| Projected balance | $50,741 |
| Gap today | $45,000 |
Assumptions and limits
- Assumes a constant interest rate; real savings rates change.
- Taxes and inflation are not modelled. The search stops at 1,200 months (100 years) if the goal is not reached by then.
Educational estimate only. It is not financial, tax, legal, or investment advice.