Re: Future Value calculation

From: Fred Smith (fredsmith99_at_yahoo.com)
Date: 08/12/04 

Date: Wed, 11 Aug 2004 21:51:32 -0600

While there is a convention for signs (-ve is money out of your pocket, +ve
is money into your pocket), in fact it doesn't matter as long as you are
consistent.

PV is normally positive, because you've taken money out of your pocket to
invest. Follow the same convention with PMT. If you're investing money, it's
positive; if you're receiving the money (like your withdrawals), it's
negative. If PV is positive, FV is negative, because the cash flow is in the
opposite direction. 

-- 
Regards,
Fred
Please reply to newsgroup, not e-mail
"Pat Jennings" <patjennings@attglobal.net> wrote in message
news:eq2Zjv6fEHA.396@TK2MSFTNGP12.phx.gbl...
> Amplifying my note, here are the values to be considered in the
calculation:
> First investment interest rate: 10.4%, annually
> First series investment amount: $1,503.00, annually
> First series: 20 years
>
> Second rate: (A) 10.4%, alternate case (B) 15%
> Second series withdarawls from the balance: $837, annually
> Second series: 11 years
>  have been fighting this for some time now.  Any assistance in teaching me
> how to structure the formula will be greatly appreciated.
> Thanks
>
> "Pat Jennings" <patjennings@attglobal.net> wrote in message
> news:%23KG4SE5fEHA.1428@TK2MSFTNGP10.phx.gbl...
> > OK.  However, my original posting was not stated correctly.  What I am
> > trying to figure out is the cash flow of an annuity, wherein the second
> > series of flows is not investments.  Rather, the second series is
> withdrawls
> > from the balance (future value) of the first series.  The balance, as
> > withdrawls are being made, will continue to earn interest.  I'm not sure
> > which sign (+/-) goes where.
> >
> > "Fred Smith" <fredsmith99@yahoo.com> wrote in message
> > news:%23iTOol0fEHA.1644@tk2msftngp13.phx.gbl...
> > > You can verify the calculation by creating a spread***. Put each
cash
> > flow
> > > in Column A, the interest rate in Column B and the term (number of
> > periods)
> > > in C. In Column D calculate the future value [=fv(b1,c1,0,a1)]. Sum
> Column
> > > D. It should equal the result of Chip's formula
> > >
> > > -- 
> > > Regards,
> > > Fred
> > > Please reply to newsgroup, not e-mail
> > >
> > >
> > > "Pat Jennings" <patjennings@attglobal.net> wrote in message
> > > news:Oo0aHIxfEHA.3632@TK2MSFTNGP11.phx.gbl...
> > > > Thank you Chip. It appears to work - although, I do not know of a
way
> to
> > > > verify.
> > > >
> > > > "Chip Pearson" <chip@cpearson.com> wrote in message
> > > > news:ulTZi5wfEHA.3988@tk2msftngp13.phx.gbl...
> > > > > Pat,
> > > > >
> > > > > Try using the FV function, and using an FV function at the PV
> > > > > value. E.g.,
> > > > >
> > > > > =FV(rate2,nper2,pmt2,FV(rate1,nper1,pmt1))
> > > > >
> > > > >
> > > > > -- 
> > > > > Cordially,
> > > > > Chip Pearson
> > > > > Microsoft MVP - Excel
> > > > > Pearson Software Consulting, LLC
> > > > > www.cpearson.com
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > > "Pat Jennings" <patjennings@attglobal.net> wrote in message
> > > > > news:OLRbP1wfEHA.3548@TK2MSFTNGP09.phx.gbl...
> > > > > > There is a series of investments (same amount, for a specified
> > > > > time).
> > > > > > Afterwhich, there is a series of investments (same amount - but
> > > > > different
> > > > > > from the amount of the first series).  How to calculate the
> > > > > Future Value
> > > > > > over the entire time-period. First calculation of the FV with a
> > > > > constant
> > > > > > interest rate over the entire combined series. Second, with an
> > > > > interest rate
> > > > > > that changes at the onset of the second investment series.
> > > > > >
> > > > > >
> > > > >
> > > > >
> > > >
> > > >
> > >
> > >
> >
> >
>
>