How our calculators work

Formula

• Monthly compounding: every month, balance = balance × (1 + r ÷ 12) + monthly contribution
• Yearly compounding: every year, balance = balance × (1 + r) + 12 × monthly contribution

Assumptions & limits

• r is the annual rate you enter and stays constant for the whole period.
• Contributions are added at the end of each period, so a new deposit starts earning in the following period.
• Taxes, fees and inflation are not deducted. Use the Real ROI calculator to see results in today’s money.

Sources

• U.S. SEC: Investor.gov compound interest calculator (useful for cross-checking)

Formula

• Payment = P × i × (1 + i)^n ÷ ((1 + i)^n − 1), with i = annual rate ÷ payments per year and n = years × payments per year
• Interest accrues monthly on the outstanding balance; extra payments reduce principal in the month they are made.

Assumptions & limits

• Fixed interest rate for the life of the loan.
• Payments can be monthly, every 6 months or yearly; extra payments can be monthly, yearly or a one-time payment in month 1.
• Prepayment penalties, insurance and late fees are not included.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Amount financed = vehicle price + sales tax − down payment − trade-in value
• Sales tax = vehicle price × tax rate
• Payment = L × i × (1 + i)^n ÷ ((1 + i)^n − 1), where L is the amount borrowed, i the monthly rate (annual rate ÷ 12) and n the number of months

Assumptions & limits

• Sales tax is applied to the full vehicle price. Many U.S. states tax only the price minus the trade-in, so your tax may be lower.
• Registration, title, dealer fees and add-ons are not included unless you add them to the price.
• Fixed APR for the whole term.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Months to pay off = −ln(1 − i × B ÷ P) ÷ ln(1 + i), with i = monthly rate, B = balance and P = your fixed monthly payment
• Minimum-payment comparison: each month the payment is the larger of $25 or 1% of the balance plus that month’s interest.

Assumptions & limits

• No new purchases are added to the card.
• The rate stays constant and interest compounds monthly (some U.S. cards compound daily, which costs slightly more).
• Rate basis: an effective annual rate (E.A.) is converted to its monthly equivalent, (1 + E.A.)^(1/12) − 1; a nominal APR is divided by 12. E.A. is the default in Spanish (Colombian convention), APR in English (U.S. convention).
• If your payment doesn’t cover the monthly interest, the balance never gets paid off, and the calculator tells you so.
• “1% + interest, $25 floor” is a common issuer formula; check your statement for your card’s exact rule.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Monthly budget = sum of all minimum payments + your extra amount (the same every month)
• Each month: add one month of interest to every balance, pay every minimum, then send whatever is left to the target debt.
• Snowball targets the smallest balance first; avalanche targets the highest APR first. When a debt is cleared, its minimum rolls into the next target.

Assumptions & limits

• Rates and minimum payments stay fixed and no new debt is added.
• The simulation stops at 100 years if the budget can’t keep up with the interest.
• Rate basis: an effective annual rate (E.A.) is converted to its monthly equivalent, (1 + E.A.)^(1/12) − 1; a nominal APR is divided by 12. E.A. is the default in Spanish (Colombian convention), APR in English (U.S. convention).

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• New loan amount = sum of current balances + closing / origination fee
• Payment = L × i × (1 + i)^n ÷ ((1 + i)^n − 1), where L is the amount borrowed, i the monthly rate (annual rate ÷ 12) and n the number of months
• Current debts: payoff time for each debt from its own payment; with the snowball option, freed-up payments roll to the smallest remaining balance.

Assumptions & limits

• All rates are fixed.
• Fees are financed into the new loan, not paid upfront.
• Prepayment penalties on the old debts and changes to your credit score are not modeled.
• Rate basis: an effective annual rate (E.A.) is converted to its monthly equivalent, (1 + E.A.)^(1/12) − 1; a nominal APR is divided by 12. E.A. is the default in Spanish (Colombian convention), APR in English (U.S. convention). The same basis applies to every rate in the comparison.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Financed amount = purchase price + one-time fee
• Monthly installment = A × i × (1 + i)^n ÷ ((1 + i)^n − 1), with i = monthly rate and n = number of installments
• Real extra cost = sum of all installments − purchase price

Assumptions & limits

• Rate basis: an effective annual rate (E.A.) is converted to its monthly equivalent, (1 + E.A.)^(1/12) − 1; a nominal APR is divided by 12. E.A. is the default in Spanish (Colombian convention), APR in English (U.S. convention).
• Fixed rate and fixed installments. Card handling fees or insurance are not included unless you enter them as the one-time fee.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Needs = 50% of take-home income · Wants = 30% · Savings and extra debt payments = 20%

Assumptions & limits

• Income is your monthly take-home pay (after taxes).
• The split is a starting point, not a rule: in high-cost cities “needs” often take more than 50%.

Sources

• Elizabeth Warren & Amelia Warren Tyagi, All Your Worth (2005), the book that popularized the 50/30/20 rule

Formula

• Months covered = emergency savings ÷ essential monthly expenses
• Target = monthly expenses × chosen months (3, 6, 9 or 12) · Gap = target − current savings

Assumptions & limits

• 3–6 months is the common guideline; 9–12 months suits single-income households, freelancers or unstable jobs.
• Only count money you can access within a few days (savings accounts, money-market funds).

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Monthly deposit = Goal × i ÷ ((1 + i)^n − 1), with i = annual rate ÷ 12 and n = months until the deadline

Assumptions & limits

• You start from zero and deposit at the end of each month.
• The interest rate stays constant; taxes and fees are not deducted.

Sources

• U.S. SEC: Investor.gov compound interest calculator (useful for cross-checking)

Formula

• Future value = S × (1 + i)^n + C × ((1 + i)^n − 1) ÷ i, with S = current savings, C = monthly contribution, i = annual return ÷ 12, n = months until retirement
• In today’s money = future value ÷ (1 + inflation ÷ 12)^n
• Sustainable income = 4% of the inflation-adjusted balance per year, shown per month

Assumptions & limits

• Return and inflation are constant; real markets go up and down.
• Contributions stay the same (no yearly raises).
• Taxes, fees, Social Security and pensions are not included.

Sources

• William P. Bengen (1994), "Determining Withdrawal Rates Using Historical Data", Journal of Financial Planning (origin of the 4% rule)
• Cooley, Hubbard & Walz (1998), "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable" (the Trinity study)

Formula

• FIRE number = annual expenses ÷ safe withdrawal rate (4% by default, i.e. 25× expenses)
• Years to FIRE = ln((C + T × i) ÷ (C + S × i)) ÷ ln(1 + i) ÷ 12, with C = monthly savings, T = FIRE number, S = current savings, i = annual return ÷ 12

Assumptions & limits

• Expenses stay constant. To keep everything in today’s money, enter a real (after-inflation) return.
• Constant return, no taxes.

Sources

• William P. Bengen (1994), "Determining Withdrawal Rates Using Historical Data", Journal of Financial Planning (origin of the 4% rule)
• Cooley, Hubbard & Walz (1998), "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable" (the Trinity study)

Formula

• Investing: amount × (1 + expected return)^years
• Paying off debt: amount × (1 + debt rate)^years (the interest you avoid)

Assumptions & limits

• Both options compound yearly over the same period.
• Paying debt is a guaranteed return; investment returns are not, and may be taxed.
• Tax deductions on interest (e.g. mortgages or student loans) are not considered.

Formula

• Future purchasing power = amount ÷ (1 + inflation)^years
• Amount needed to keep pace = amount × (1 + inflation)^years

Assumptions & limits

• Inflation is the same every year; real inflation varies.

Sources

• U.S. Bureau of Labor Statistics: Consumer Price Index (CPI)
• DANE (Colombia): Consumer Price Index (IPC)

Formula

• Real return = (1 + nominal return) ÷ (1 + inflation) − 1 (the Fisher equation)
• Projection = amount × (1 + rate)^years, shown with the nominal and the real rate

Assumptions & limits

• Return and inflation are constant; taxes and fees are not deducted.

Sources

• Irving Fisher, The Theory of Interest (1930)
• U.S. Bureau of Labor Statistics: Consumer Price Index (CPI)

Formula

• Net worth = total assets − total liabilities
• Debt-to-asset ratio = total liabilities ÷ total assets

Assumptions & limits

• Use current market values (what you could sell for today), not what you paid.
• Ratio bands: under 30% is low leverage, 30–60% moderate, over 60% high.

Sources

• Federal Reserve: Survey of Consumer Finances

Formula

• Taxable income = gross − pre-tax health premiums − traditional 401(k) − standard deduction ($16,100 single · $32,200 married filing jointly, 2026)
• Federal tax = progressive 2026 brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) applied slice by slice to taxable income
• FICA = 6.2% Social Security on wages up to $184,500 + 1.45% Medicare on all wages + 0.9% Additional Medicare above $200,000 (single) or $250,000 (married)
• State tax = your effective state rate × (gross − pre-tax premiums − 401(k))
• Net = gross − federal − state − FICA − 401(k) − health premiums · biweekly = annual net ÷ 26 · hourly = ÷ 2,080

Assumptions & limits

• Standard deduction only: no tax credits (e.g. Child Tax Credit), itemized or other above-the-line deductions.
• 401(k) contributions are traditional (pre-tax) and health premiums are paid through a pre-tax (Section 125) plan.
• Married filing jointly assumes a single earner; with two incomes, run each paycheck and note that brackets are shared.
• State and local taxes use one flat effective rate you enter; actual state brackets and credits vary.
• Shows the tax owed for the year, which can differ from what your employer withholds on each paycheck.

Sources

• IRS: Federal income tax rates and brackets
• IRS Rev. Proc. 2025-32: 2026 inflation adjustments (brackets and standard deduction)
• Social Security Administration: 2026 contribution and benefit base ($184,500)

Formula

• Profit = revenue − expenses
• Net income = profit × (1 − tax rate)
• Real hourly wage = net income ÷ hours worked

Assumptions & limits

• All figures are monthly.
• A single flat tax rate. In the U.S., self-employment tax (15.3%) usually applies on top of income tax.
• Count every hour, including unpaid admin and travel time.

Sources

• IRS: Self-employment tax (Social Security and Medicare taxes)

Formula

• Annual = hourly rate × hours per week × weeks per year
• Monthly = annual ÷ 12 · biweekly = annual ÷ 26 · daily = hourly rate × (hours per week ÷ 5)

Assumptions & limits

• Gross pay before taxes.
• Unpaid time off lowers weeks per year; overtime pay is not modeled.

Formula

• Tip = bill × tip %
• Per person = (bill + tip) ÷ number of people
• Round-up rounds the total up and shows the resulting effective tip %

Assumptions & limits

• The tip is calculated on whatever amount you enter as the bill (before or after tax).
• 15–20% is customary for table service in the U.S.

Formula

• Principal & interest = L × i × (1 + i)^n ÷ ((1 + i)^n − 1), where L is the amount borrowed, i the monthly rate (annual rate ÷ 12) and n the number of months, with L = home price − down payment
• Monthly total = principal & interest + (home price × property-tax rate) ÷ 12 + insurance ÷ 12 + HOA

Assumptions & limits

• Fixed-rate mortgage.
• PMI (usually required with less than 20% down in the U.S.) is not included.
• Property tax and insurance stay constant over the loan.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Maximum payment = 28% of gross monthly income
• Maximum loan = payment × (1 − (1 + i)^−n) ÷ i, with i = annual rate ÷ 12 and n = months
• Maximum home price = maximum loan + down payment

Assumptions & limits

• The full 28% goes to principal and interest. Property tax, insurance, HOA and PMI would lower the price you can afford.
• Other debts (the 36% back-end ratio) are not checked here; the Financial Health Score covers them.
• Fixed rate.

Sources

• Consumer Financial Protection Bureau (CFPB): consumer loan and credit guides

Formula

• Home price = price per m² (city and tier) × home size
• Affordability = home price ÷ annual gross income for the selected year (years of income needed)
• Real values = nominal values deflated with the CPI and expressed in money of the selected start year

Assumptions & limits

• Prices are city averages for education, not appraisals of a specific property.
• Historical prices apply the national price index (Colombia: IPVU via the BIS, annual averages; U.S.: FRED median sales price) to today’s city prices, so a city’s own history may differ.

Sources

• Colombia: official minimum wage decrees 1984–2026 (incl. Decrees 1469/1470 of 2025)
• BIS Residential Property Prices for Colombia (source: Banco de la República IPVU), via FRED QCON628BIS / QCOR628BIS
• La Galería Inmobiliaria / Ciencuadras: 2026 price per m² market reports
• FRED: Median Sales Price of Houses Sold in the U.S. (MSPUS)
• DANE (Colombia): Consumer Price Index (IPC)
• U.S. Bureau of Labor Statistics: Consumer Price Index (CPI)

Formula

• Score = 20% emergency fund + 20% savings rate + 20% retirement savings + 15% debt-to-income + 15% housing cost + 10% total debt load
• Each pillar scores 0–100 against a target: 6 months of expenses saved · 20% savings rate · non-mortgage debt payments near 0% of income (0 points at 20%) · housing ≤ 28% of income (0 points at 50%) · retirement savings at an age-based multiple of income (1× at 30 up to 10× at 67) · debt balances below 50% of annual income

Assumptions & limits

• Ratios are the same in every country; only currency, default numbers and peer medians change.
• U.S. peer benchmarks are rounded medians from the Federal Reserve’s Survey of Consumer Finances; other countries use illustrative estimates.
• The score is computed in your browser. The optional AI Money Coach sends the numbers you entered to our server and an AI provider to write the advice; if it’s unavailable, a local rules engine is used instead.

Sources

• Federal Reserve: Survey of Consumer Finances
• Fidelity: retirement savings guideline by age (multiples of salary)

Formula

• Settlement base = basic salary + transport allowance (if salary ≤ 2 minimum wages)
• Prima = base × days worked in the current semester ÷ 360 · Cesantías = base × days worked in the current year ÷ 360
• Interest on cesantías = cesantías × days × 12% ÷ 360
• Vacation pay = basic salary ÷ 30 × (days worked × 15 ÷ 360 − vacation days already taken)
• Severance for dismissal without just cause (art. 64 CST): indefinite contract: 30 days of salary for the first year + 20 per additional year (20 + 15 if salary ≥ 10 minimum wages); fixed-term: salary for the remaining days of the term

Assumptions & limits

• Days are counted on the 360-day commercial calendar (every month = 30 days), both dates included.
• Fixed ordinary salary; integral, variable pay, overtime and commissions are not included.
• Cesantías from previous years are assumed already deposited in the employee’s fund.
• Salary owed for the last pay period and payroll deductions are not included.

Sources

• Código Sustantivo del Trabajo: arts. 64 (indemnización), 186 (vacaciones), 249 (cesantías) y 306 (prima)
• Ley 52 de 1975: 12% annual interest on cesantías
• Decrees 1469 and 1470 of 2025: 2026 minimum wage ($1,750,905) and transport allowance ($249,095)

Formula

• Employee contributions: health 4% + pension 4% of the contribution base (salary, between 1 and 25 minimum wages) + Fondo de Solidaridad Pensional 1%–2% from 4 minimum wages
• Withholding base (procedure 1) = salary − mandatory contributions − deductions − exempt income − 25% exempt income (capped at 790 UVT a year)
• Deductions and exempt income together are capped at 40% of net income and 1,340 UVT a year
• Withholding = art. 383 E.T. table applied to the base in UVT (0% up to 95 UVT, then 19%, 28%, 33%, 35%, 37%, 39%), rounded to the nearest $1,000
• Net pay = salary + transport allowance − contributions − withholding − voluntary contributions

Assumptions & limits

• 2026 values: UVT $52,374, minimum wage $1,750,905, transport allowance $249,095.
• Dependants: 10% of income up to 32 UVT a month; mortgage interest up to 100 UVT; prepaid medicine up to 16 UVT; voluntary pension/AFC up to 30% of income.
• Fondo de Solidaridad Pensional uses the Ley 100 rates; the Ley 2381 de 2024 rates take effect on 1 April 2027.
• Ordinary (not integral) salary. Withholding on prima and other occasional payments is not included.
• Employer cost assumes ARL risk class I and the health/SENA/ICBF exemption for salaries under 10 minimum wages.

Sources

• Estatuto Tributario: arts. 206, 336, 383, 387 and 388
• DIAN Resolution 000238 of 2025: 2026 UVT ($52,374)
• Ley 100 de 1993, art. 27: Fondo de Solidaridad Pensional rates
• Constitutional Court ruling C-264 of 2026: Ley 2381 de 2024 takes effect 1 April 2027

Formula

• CDT interest = amount × ((1 + E.A. rate)^(days ÷ 365) − 1), paid at maturity; 4% withheld on all interest
• Savings account: daily interest = balance × ((1 + E.A. rate)^(1 ÷ 365) − 1), compounded daily; 7% withheld on any day whose interest exceeds 0.055 UVT
• Net E.A. return = (final ÷ amount)^(365 ÷ days) − 1 · Real return = (1 + net) ÷ (1 + inflation) − 1

Assumptions & limits

• Rates and inflation stay constant for the whole term.
• When a day’s interest exceeds the minimum base, the 7% applies to that whole day’s interest.
• Withholding is an advance on income tax and can be credited in the tax return; the final tax is not modeled.
• The 4x1000 (GMF) is not charged on interest; account movements are not modeled.

Sources

• Estatuto Tributario: arts. 395 and 396 (withholding on financial returns)
• DIAN Resolution 000238 of 2025: 2026 UVT ($52,374)
• DANE (Colombia): Consumer Price Index (IPC)