Calculating Reinvested Dividends Over A Large Number of Intervals

[kivikatz]

I would like to calculate the total ending principal that factors in the initial investment and recurring dividends reinvested for X number of intervals. To calculate the principal balance for each interval, the previous dividend is added to the principal, and the new dividend is calculated by the stated rate, which is then added to the principal to calculate the dividend in the next interval.

I can't seem to get my head around what formula I could use to calculate this over a 100 time interval, for example, and I would appreciate some help on this. For instance, if the starting principal is 1,000,000 and the dividend is 5%, which is reinvested, I would like to see what the principal would total after 100 intervals.

I could set up a table with 100 rows to calculate the running and end total, but what if I wanted to calculate the total for 10,000 or 100,000 intervals. I hope you understand what I am trying to accomplish. Thanks!

 

[DRSteele]

That's just compound interest.

FV = PV (1+r)^n

Assuming you're getting the dividend of 5% per period for 100 periods:

FV = 100,000 (1.05)^100 = $13,150,125.78

 

[kivikatz]

Thanks for your help.