I've got a savings objective to achieve in 6 years and I'm trying to work out the percentage of salary I need to put towards it to achieve it.
I am trying to work out how to calculate the future value of my savings account.
I have $10 in savings.
Each year I contribute 10% of my earnings to my savings account.
I will earn $1000 this year. Each year my salary increases with inflation and I'm assuming it's going to be 2% for the foreseeable future.
My savings account accumulates interest at a rate of 6% each year and all of that is re-invested.
I can do it the long manual way (excel spreadsheets), I was just wondering if there was an elegant formula I could use?
The question is:
Given the above, how much will I have in my savings account at the end of the savings period i.e. in 6 years time?