paco
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I'm looking for some financial formulas. One of them is to get the time required (number of years) if someone want to invest an initial amount and than invest on a monthly base.
I need the formula to determine the time period required to reach a future value if an initial amount is invested plus monthly investments.
Right now, I have two formula that I would like to merge. The first one only consider the initial amount invested:
The second one only consider recurring investment:
What I need is include an initial amount + monthly investment to get the number of years to reach a futur value.
I've look everywhere on the web but didn't find the perfect formula... I'm stuck now.. Can someone help me with this???
Thanks in advance.
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Wed Jul 27, 2011 5:54 pm |
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oldguy
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I tried your first eqn - the answer was off by a factor of about 10.
I used $1M for FV, $10,000 for A, 12%/yr interest, and compounded 12 times/yr. I got 462 yrs. (The real answer is about 40 yrs.) Ie, Factor of 100 = e^(.12*39) That's continous compounding rather than monthly, but the answer is approx the same).
Anyway, to solve your problem, you would need to solve both eqns for FV, combine them by setting FV equal (FV = FV). And then solve the resultant eqn for 'n'.
I'm way to lazy to solve it, I just pop it into excel. So if you have a set of parameters that you want the answer for, I'll run it for you.
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Wed Jul 27, 2011 6:39 pm |
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littleroc02us
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What I do is plug formulas into Excel that have certain entries in cell that apply. Here is what it looks like for example when I am attempting to calculate what my index fund will project to be at a certain interest rate which I can modify by changing one cell.
=FV((F6/12),F7,-F8,-F9,F10)
F6=interest rate
12=periods
F7=nper
F8=pmt
F9=pv
f10=type
This works well in Excel because I can project what my outcome will be based on Compound interest.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Wed Jul 27, 2011 6:55 pm |
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oldguy
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I tried your first eqn - the answer was off by a factor of about 10.
I used $1M for FV, $10,000 for A, 12%/yr interest, and compounded 12 times/yr. I got 462 yrs. (The real answer is about 40 yrs.) Ie, Factor of 100 = e^(.12*39) That's continous compounding rather than monthly, but the answer is approx the same).
Anyway, to solve your problem, you would need to solve both eqns for FV, combine them by setting FV equal (FV = FV). And then solve the resultant eqn for 'n'.
I'm way to lazy to solve it, I just pop it into excel. So if you have a set of parameters that you want the answer for, I'll run it for you.
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Wed Jul 27, 2011 9:33 pm |
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coaster
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And there's also a freeware Excel-compatible (actually Office-compatible) application --- google for "Open Office" that should have those formulas. Just pop in the numbers as oldguy says and forget all those complicated formulas. 
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Thu Jul 28, 2011 6:15 am |
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paco
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Hi Guys,
Thanks but I really need the formula. I need to program this in xcode so excel can't help me at all. I don't only want the result... I need the way to obtain the result.
I now use a new formula to get the future value if someone invest an initial amount and make periodic deposit for a certain amount of time. Here it is:
I used my TI-92 Plus to try to solve the variable 'n' in this formula... but the calculator doesn't seams to be able to archive it.
Can anyone help me to solve n ???
Thanks in advance... It'll be more than appreciated!!
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Fri Jul 29, 2011 9:58 pm |
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jfurnish
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PV and pmt should be a negative number
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Sat Jul 30, 2011 12:11 am |
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oldguy
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Going thru the algebra, I get this. The (1+i) after the log is subscript, ie the log base (but I don't know how to type eqns here - it worked in Word but I can't paste it here)
n = log(1+i)((FV + p/i)/(PV + p/i))
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Sat Jul 30, 2011 3:43 am |
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coaster
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Posting mathematical symbols directly in the forum editor won't work. If that formula is composed directly in raw unicode and then that enclosed within BBCode code tags
code:
∑∞
like so, it should display correctly in recent-version browsers that support unicode.
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Sat Jul 30, 2011 4:57 pm |
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paco
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I tried many things but can't figure where the subscript goes. Can you please use pow(...,...) to indentify me what should be subscripted. Or else, use ^ as you would do in excel please.
Thanks a lot.
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Sat Jul 30, 2011 8:37 pm |
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oldguy
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quote:
tried many things but can't figure where the subscript goes.
It is "log to the base (1+i)". So (1+i) is the only term that is a subscripted.
For example, if you had a natural log it would be "log to the base e", the 'e' would be subscripted after the 'log'. But I still don't know how to subscript, sorry.
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Sat Jul 30, 2011 9:21 pm |
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oldguy
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Try this solution, I took the log of both sides and reduced, it may be easier to put into code -
n = (log (FV+p/i) - log (PV+p/i)) / log (1+i)
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Sat Jul 30, 2011 10:12 pm |
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littleroc02us
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My formula is in the works and I modify with the help of my accountant's knowledge. I don't want to make it to complicated but it's more informative to see the compound interest building each year and gives me projections.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Mon Aug 01, 2011 3:25 pm |
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