Tanda Calculator (ROSCA Savings Circle)

How it works

Pot = contribution × members × (1 − fee) · your cash flow in round k = pot (if k = your turn) − contribution · value = Σ flowₖ ÷ (1 + j)^(k − 1), j = alternative annual rate converted to one round · positive = better than the alternative

A rotating savings and credit association — tanda or cundina in Mexico, susu in West Africa and the Caribbean, pandero in Peru, chit fund or committee in South Asia — pools the same contribution from every member each round and gives the whole pot to one member in turn. Without a fee nobody pays interest, but the timing matters: early numbers get an interest-free loan they repay over the following rounds, late numbers are lending to the group and save without interest. Valuing the flows at a savings or borrowing rate shows what your number is really worth. The main risk is a member who stops paying after collecting.

Worked example

Ten members put in 1,000 every week, so the pot is 10,000.00. With number 3 you pay 3,000 up to and including your turn, receive 10,000 in week 3 and owe 7,000 over the remaining 7 weeks — an interest-free loan. Valued against a 10% annual rate, getting the money early is worth about 45.29 in today’s money; with number 10 the same calculation would show a small loss.

Sources: Wikipedia — Rotating savings and credit association

Frequently asked questions