Money Calculators That Actually Make Sense

The compound interest formula is: A = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]

• P = Initial principal
• r = Annual interest rate (decimal)
• n = Compounding periods per year
• t = Number of years
• PMT = Regular contribution per period

This calculator uses the future value of an annuity formula for monthly contributions, ensuring accurate results matching what banks and brokerages use.

Monthly mortgage payment formula: M = P × [r(1+r)^n] / [(1+r)^n - 1]

• M = Monthly payment
• P = Loan amount (price - down payment)
• r = Monthly interest rate (annual rate ÷ 12)
• n = Total number of payments (years × 12)

PITI = Principal + Interest + Taxes + Insurance. This is the true monthly cost most lenders use to qualify borrowers.

Adding extra to your monthly payment reduces principal faster, which means future interest is calculated on a smaller balance. Even $50/month extra on a $25,000 loan at 8.5% can save you hundreds in interest and pay off the loan months early.

• 15-18% — Standard service at a sit-down restaurant
• 20-25% — Excellent service
• 10-15% — Casual or counter service
• 15-20% — Bartenders, taxi/rideshare drivers
• $1-2 per drink — Bar tipping at counter

This uses 2026 federal tax brackets and standard deduction. It does NOT include state income tax, which varies by state (CA, NY, etc. add 5-13%; TX, FL, WA, NV have no state income tax).

2026 Standard Deduction: Single $15,200 · Married $30,400 · HoH $22,800

FICA: 6.2% Social Security (capped at $176,100) + 1.45% Medicare + 0.9% additional Medicare on wages over $200,000.

This is an estimate. Consult a tax professional for filing decisions.

The "4% rule" suggests you can safely withdraw 4% of your retirement portfolio annually without running out. This means you need 25 times your annual spending saved by retirement.

Example: $60,000 annual spending × 25 = $1.5M target portfolio.

This assumes a balanced portfolio (60% stocks / 40% bonds), 30-year retirement, and accounts for inflation. It is a guideline, not a guarantee.

ROI (Return on Investment): Total percentage gain over the entire holding period. Easy to understand but doesn't account for time.

CAGR (Compound Annual Growth Rate): The annualized rate of return — what your investment grew by per year on average. This is what professionals use to compare investments held for different durations.

Formula: CAGR = (Final / Initial)^(1/Years) - 1

Most credit cards calculate minimum payment as 1-2% of balance + interest. At 24% APR, paying only the minimum on a $5,000 balance can take 20+ years to pay off and cost you $7,000+ in interest alone.

Rule of thumb: Pay at least 3× the minimum, or fixed amounts that pay off within 24-36 months. Even $50 more per month can cut years off your debt.

• Under 1 year: High-yield savings account (4-5% APY)
• 1-3 years: CDs or money market accounts
• 3-5 years: Mix of CDs and conservative bond funds
• 5+ years: Diversified investment portfolio (consider stocks)

• Long-term average (100+ years): ~3.1%
• 2010-2020 average: ~1.8%
• 2021-2024 average: ~5.5% (post-pandemic)
• Federal Reserve target: 2.0%

Inflation erodes purchasing power. $100,000 today at 3% inflation will buy what $55,367 buys today — in 20 years.