# 6 %, 8% or Warren Buffet percentages?

What if you save 100 USD every month for 20 years and you get 6 % per year?

To calculate the future value of your savings with a monthly contribution of $100, an average annual percentage rate (APR) of 6%, and a savings period of 20 years, you can use the future value of an annuity formula:

FV = Pmt * (((1 + r)^n - 1) / r)

Where:
- FV is the future value of the savings.
- Pmt is the monthly contribution ($100).
- r is the monthly interest rate (6% / 12 months = 0.06 / 12 = 0.005).
- n is the total number of payments (20 years * 12 months/year = 240 months).

Now, plugging in the values:

FV = 100 * (((1 + 0.005)^240 - 1) / 0.005)

Calculating this yields:

FV ≈ $48,386.13

So, after 20 years of saving $100 per month with an average APR of 6%, you would have approximately $48,386.13.


![](https://images.ecency.com/DQmXFLYgRndE9F5BDd8QGQ4sRMvkDQhbeJ5qE8BcHCwGVPM/062fc09a_bf1f_463e_9143_7a220d0d2699.jpg)


**Not bad at all, but what at 8%?**

If the average APR increases to 8%, you can use the same formula to calculate the future value:

FV = Pmt * (((1 + r)^n - 1) / r)

Where:
- FV is the future value of the savings.
- Pmt is the monthly contribution ($100).
- r is the monthly interest rate (8% / 12 months = 0.08 / 12 = 0.00667).
- n is the total number of payments (20 years * 12 months/year = 240 months).

Now, plugging in the values:

FV = 100 * (((1 + 0.00667)^240 - 1) / 0.00667)

Calculating this yields:

FV ≈ $66,021.19

So, after 20 years of saving $100 per month with an average APR of 8%, you would have approximately $66,021.19.

**Looks even more decent, but what at 12 % APR, which is what Berkshire Hathaway has ad track record for the last 45 years?**

Using the same formula as before, but with an average APR of 12%:

FV = Pmt * (((1 + r)^n - 1) / r)

Where:
- FV is the future value of the savings.
- Pmt is the monthly contribution ($100).
- r is the monthly interest rate (12% / 12 months = 0.12 / 12 = 0.01).
- n is the total number of payments (20 years * 12 months/year = 240 months).

Now, plugging in the values:

FV = 100 * (((1 + 0.01)^240 - 1) / 0.01)

Calculating this yields:

FV ≈ $152,191.64

So, after 20 years of saving $100 per month with an average APR of 12%, you would have approximately $152,191.64.


![](https://images.ecency.com/DQmcYHFwQLctwqGpNWsr8ivjbC7yrX4MT373SWWcHjzT7oC/2e10672c_2851_49c3_9bc0_cec40e2b4a6e.jpg)


This is a huge difference, and shows once again how important it is to choose wisely where you put your money in!

Berkshire Hathaway it is! 😆

No, just kidding, do your own research and choose wisely!

Sincerely,

Pele23