EXCEL

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I want to create a formula to work out how much money I'd have in 20 years if:

I start with £5000

I save £3000 per year

Interest is earned at 5% PA.

I'd have £65k without interest, but interest must be applied gradually, each year.

£68250 if i just sling 5% on the end of it.

I'm using openoffice.

Cheers.
 
CUMPINT is the function command in Excel for cumulative interest, not sure if open office has that command though Steve.
 
£5000 over 20 yrs at 5% annnual compounded interest rate.

The 'caret' ^ is used to signify an exponent, The exponent shows how many copies of the base are multiplied together... In 3², superscript 2 is the exponent... three squared or three raised to the power of two.... 3x3 = 9

(1.05 ^ 20) x 5000 = £ 13266.49
But, as one may expect, inflation at say 5% would reduce the final value to :-
(1.05 ^ -20) x 13266.49 = £5000

========================

Assume the £3000 per annum will be saved on a monthly basis, at each month end. £250 for a period of 240 months.
The monthly rate ((1.05) ^ (1/12)) - 1
Raising to power of one twelfth is effectively finding the twelfth root.

The calculation.
Let R = monthly rate plus 1 = (1.05 ^ (1/12))
Let N = number of periods = 240
Let A = monthly sum invested = £250

A( (R^N) - 1 ) ÷ ( R - 1 )

(250 ( (1.00407... ^240) - 1 )) ÷ ( 1.00407... - 1 ) = £ 101451.12

Grand total.
£ 101451.12 + £ 13266.49 = £ 114717.61

-0-
 
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