Suppose your goal is Rs 5,000,000 in 5 years, you already have Rs 500,000 saved, and you expect a
10% annual return. At 10% a year, your existing Rs 500,000 grows to about Rs 822,654 over the 60
months on its own. That leaves a gap of about Rs 4,177,346 to fill from new monthly deposits. Solving
the savings annuity for that gap, at a monthly rate of 10% over 12, gives a required deposit of about
Rs 53,945 a month. Across 60 months you personally contribute about Rs 3,236,702, and the remaining
Rs 940,644 of the goal comes from investment growth on those deposits plus the growth on your starting
balance. If you expected no return, the tool would simply split the remaining gap evenly across the
months, which would mean a larger monthly figure.
Item
Amount (PKR)
Goal amount
Rs 5,000,000
Current savings grow to
Rs 822,654
Gap to fund
Rs 4,177,346
Total you contribute
Rs 3,236,702
Monthly saving needed
Rs 53,945
How it is calculated
The tool starts by growing your current savings to the goal date, multiplying them by one plus the
monthly return raised to the number of months. It subtracts that future balance from your target to
find the remaining gap that monthly deposits must cover. To turn that gap into a monthly figure it
divides by the future-value factor of a regular savings stream, which is one plus the monthly rate
raised to the number of months minus one, all over the monthly rate. The result is the level monthly
deposit needed. Total contributions are that deposit times the number of months, and the difference
between the goal and your contributions plus grown savings is the compounding the returns provide. A
higher expected return lowers the monthly saving, while a zero return makes the tool divide the gap
evenly across the months instead.
Frequently asked questions
How do I work out the monthly saving for a goal?
Take your target, subtract what your current savings will grow to, and divide the remainder by the future-value factor for a monthly deposit at your expected return. This tool does that maths for you. If you expect no return, it simply divides the remaining gap evenly across the months.
What annual return should I use for a savings goal in Pakistan?
National Savings certificates and government bonds in Pakistan have offered gross rates broadly in the range of 10 to 15 percent in recent years, while bank savings accounts typically offer much less. Use the actual rate on the instrument you plan to use, not a wishful estimate, because overstating the return makes the required monthly deposit look smaller than it really is.
Does starting with existing savings really make a big difference?
Yes, because your existing savings compound for the full period before the first new deposit is even made. In the worked example, Rs 500,000 already saved grows to Rs 822,654 on its own at 10 percent over five years, covering about 16 percent of the Rs 5,000,000 goal with no additional effort. The longer the timeline and the higher the return, the more powerful that head start becomes.
What if my goal timeline is less than one year?
The calculator handles sub-year timelines by treating the number of months as the planning horizon. Enter 0 in the years field and the tool cannot divide by zero months, so you would need to enter at least one month worth of time. For very short goals with no meaningful return, the monthly saving is simply the remaining gap divided by the number of months left.