# 8 Personal Financial Calculators

The Financial Literacy and Education Commission (FLEC) developed MyMoney.gov, a national financial education web site. The website includes several links to financial calculators. The following are some of our favorites:

If you want to analyze the effect of different interest rates on the monthly payments of a loan, try the Monthly Payment Calculator. Input the principal amount, interest rate, and the number of payments and this tool will calculate the required monthly payment. This is one of several useful calculators developed by the U.S. Army.

The Debt Payoff Calculator allows users to observe the impact of various interest rates and/or different monthly payments on the number of years required to pay off a loan. It also calculates the total amount a borrower will pay at specific interest rates and monthly payment levels.

The Compound Interest Calculator reveals the effect of the rate of return and time on your investments. For example: If at age 25, you begin investing \$2,000 each year and continue investing the same amount for just ten years and then stop, that \$20,000 investment will be worth \$233,114 when you reach age 65 (assuming 7 percent annual return). At 9 percent, your investment will grow to \$434,246. This simple to use tool demonstrates the time value of money and the dramatic results that can be achieved over the long term with relatively small investments.

If you prefer the safety of saving to the risks of investing, try the Savings Calculator. Input the amount you plan to save each month, the interest rate, and the number of months or years you plan to save and this online tool will provide the total amount (savings +interest) at the end of the period. For example, saving \$100 per month at 5 percent interest for 10 years will yield \$15,593 on your \$12,000 investment. Saving the same amount for 30 years dramatically demonstrates the time value of money and power of compound interest. Saving \$100 per month for 30 years at 5 percent interest yields \$83,573 on a \$36,000 investment.

Though not part of MyMoney.Gov, Nerdwallet has several helpful Mortgage Calculators, such as Rent vs BuyHow Much House Can I Afford?, and Loan Comparison Calculator. They are more detailed than a simple one, such as the payment calculator from the Dallas Fed since they also include things like property taxes and homeowner’s insurance.

The Credit Card Payment Calculator, developed by the Federal Reserve calculates the number of months(years) it will take to pay off a credit card balance if the credit card holder only pays the minimum required payment each month. The results are often dramatic.

A good alternative Credit Card Payment Calculator is provided by BankRate.com. Users do need to select the “How the credit card minimum payment is calculated” from a drop down menu. This does provide additional flexibility, but it also means users much know how their credit card company calculates the minimum payment.