Click here to launch the calculator

While calculating a yield or growth rate for a single-premium investment is relatively straightforward, calculating an average growth rate based on a regular monthly contribution is more difficult. In effect it is more of a very close approximation.

For instance, if you were to pay £50 per month into a savings plan for ten years and at year ten it was worth £10,000, in order to calculate the true growth rate exactly, you would need to calculate the number of units purchased each month, then track the growth of those specific units for the remainder of the term. This would effectively entail a polynomial order of 120 separate calculations to solve.

Also you would need accurate details of each payment, and assuming you actually had all the information, it would still be a time-consuming task. Therefore, if this is not possible, the alternative method is to use an iterative approach, incorporating the Newton-Raphson root-finding method (similar to methods used in Excel functions such as RATE). This is the method used by this calculator.

The figures projected by the calculator are only for guidance purposes, and are by no means guaranteed.

The group said it had donated vast quantities of unused booze to help make over 8million bottles of hand sanitiser for healthcare workers globally.

Guinness owner Diageo WILL pay a dividend to its shareholders despite the global lockdown of pubs

09/04/2020 05:43 AM

Whenever I see such rates I feel compelled to ask: 'Why if you have money that you don't need for seven years would you not invest it for a better return?'

I'd back an investment trust over fixing a cash Isa for 7 years at 1.65%

09/04/2020 04:41 AM

The cheapest energy tariffs have fallen by an average of £32, thanks to falling wholesale costs, new data has revealed at a time when consumption is likely to be higher with people at home more.

Savings from falling wholesale prices passed on to customers as cheapest energy tariffs fall by £32

09/04/2020 04:13 AM