Having your own car is like having a trusty sidekick in life. It's your go-to buddy for getting to work, running errands, and cruising around town hassle-free. Think of it as your personal key to freedom and convenience.
When you're thinking about getting your first car, the first thing to do is figure out how much you can afford. This means looking at your budget and considering all the costs, not just the monthly payment. You should think about things like insurance, gas, and maintenance. Once you know what you can afford, you can start looking for a car that fits your budget.
The Car Planning Calculator, an online financial tool, aids in determining the future cost of your desired car. It guides you in understanding how much you should save today to make that dream car a reality in the future.
The car planning calculator works on the concept of future value. The formula is given below:
FV= PV(1+r) ^nWhere,
FV= future cost of the car
PV= present value of the car
r= rate of interest
n= duration of investment
Imagine you're thinking about buying a car 5 years from now, and the car's current price is Rs. 8,00,000. With an expected inflation rate of 8% and a rate of return on your investments at 10%, you want to calculate the future cost of the car, considering these factors.
To determine the future cost of the car, taking into account the current price, expected inflation, and investment return, you can use the following formula:
Future Cost of Car = Rs. 8,00,000 * (1 + 0.08) ^ 5
By plugging in the current cost of the car, the assumed inflation rate, and the investment return rate, this calculation helps you estimate how much the car will cost in the future. It allows you to create a personalized investment plan to save for that future expense.
