how do I calculate Future Value of an investment ?
Assumptions Beginning Year2008 Current Age in Years18 Retirement Age in Years65 Savings Interest Rate (%/Year)10.00% Beginning Savings$5,000.00 Savings per Month$40.00 Please help me with this... I need to put this into excel FV calculator.. it asks for interest rate, NPR and PMT
Public Comments
- You need to specify the interest compounding frequency. If the interest compounding frequency is the same as the periodic payment frequency (ie interest compounded monthly), the future value of the ordinary annuity can be calculated with the following formula: FV = R·[ ((1 + i)ⁿ - 1)/i ] + PV·(1 + i)ⁿ R is the payment per period. i is the interest rate per period. n is the number of periods. n = (65-18)*12 = 564 R = 40 PV = 5000 i = 0.1/12 ≈ 0.00833 FV = 40·[ ((1.00833)^564 -1) / 0.00833 ] + 5000·(1.00833)^564 FV = $1,051,901.11 Answer: $1,051,901.11
Powered by Yahoo! Answers