Calculations

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Hi hope someone can help with this, my granddaughter is going to start saving approximately £8.43 a week, which she makes it £27K a year, but I make it £17,534.00 who is has the correct calculation... I though I was correct, but now I am not so sure.

Cadgreen

Um 438.36 !

Savvy_Sue

You can do a quick 'sanity check' by calling it £10 pw over 50 weeks. From that you can see it won't be more than £500 a year.

Of course, if either of you are working out how much the sum will be worth in 10 years if she continues to save that amount with a notional rate of compound interest, you need a calculator, but even there a basic sanity check should help ...

moremore

LOL..Complete wrong figures I put in... had a bit of bad day..8.43 times 52 and then 64....... Need to change glasses as well...

chesky

How old is your granddaughter? What's the 64 or was it just a slip of the finger?

agrinnall

Looks like your calculation is for the amount that would be paid into the savings account over 40 years, whereas hers is around 61 years - is she 21 and wanting to save for 40 years, and has calculated based on her age at the end of the period rather than the period itself?

Of course, none of this takes into acount the impact of compound interest, and I'm puzzled why anyone would think that they would want to save at the same level for such a long time - in 40 years time inflation will have made the £8.43 worth a great deal less.