Saving
How much of the goal is deposits versus growth
Total contributions subtracted from the target. Anything left over was earned by compounding, which tells you how much of the plan depends on the return assumption.
The Formula
Growth = FV - PV - PMT x n
Total contributions subtracted from the target. Anything left over was earned by compounding, which tells you how much of the plan depends on the return assumption.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| Growth | Interest portion of the final balance | currency | A high ratio means the timeline is sensitive to the assumed return and should be stress-tested at a lower rate. |
What Each Symbol Means
Growthcurrency
Interest portion of the final balance
A high ratio means the timeline is sensitive to the assumed return and should be stress-tested at a lower rate.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate how long it takes to reach a savings goal page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate How Long It Takes To Reach A Savings Goal, filed under Finance. Every number the guide produces comes from substituting into this one line.