HarryFröhlich
Board Regular
- Joined
- Mar 25, 2003
- Messages
- 116
Hi All! I am a new guy to the block and would appreciate some help concerning the following:
I need to calculate the proceeds of recurring payments at a fixed interest rate over a fixed term with one exception to the norm: Annually, the PAYMENTS grow bigger at a fixed rate (10% in the example).
It's like this:
Year 1: Payment: $1,200, interest 10%, term remaining: 20years.
Year2: Payment: $1,320 ($1,200 + 10%), interest still 10%, term remaining: 19 years of the initial 20.
The person will therefore be earning 10% compound interest on $1,200 for a full 20 years, 10% compound interest on $1,320 for 19 years, etc, until, in the last year, the payment will be $7,339.09. The person will earn 10% interest on that for 1 year only. What will the total payout be?
There has to be an easier way to calculate this than doing it the way I did here and hiding the calculations!
Hope to hear from you soon!
Harry
I need to calculate the proceeds of recurring payments at a fixed interest rate over a fixed term with one exception to the norm: Annually, the PAYMENTS grow bigger at a fixed rate (10% in the example).
It's like this:
Year 1: Payment: $1,200, interest 10%, term remaining: 20years.
Year2: Payment: $1,320 ($1,200 + 10%), interest still 10%, term remaining: 19 years of the initial 20.
The person will therefore be earning 10% compound interest on $1,200 for a full 20 years, 10% compound interest on $1,320 for 19 years, etc, until, in the last year, the payment will be $7,339.09. The person will earn 10% interest on that for 1 year only. What will the total payout be?
There has to be an easier way to calculate this than doing it the way I did here and hiding the calculations!
Hope to hear from you soon!
Harry