compound

  • Thread starter tikchye_oldLearner57
  • Start date
T

tikchye_oldLearner57

hello community

can anybody teach me how to find how much will i have at the end of 5 years???

example:

I want to save $5000 at 4% per annum for 5 years. How to derive a formula
to find out how much will i have at the end of the 5th years.

thanks community for the assistance given
 
J

joeu2004

RWN said:
5,000 * 1.04^5
Click to expand...

Equivalently:

=fv(4%, 5, 0, -5000)

However, that assumes only annual compounding. That would be
appropriate if 4% is the APY. But if it is the nominal rate and if the
OP is talking about a savings account in the US, we might expect daily
compounding at the rate of 4%/365. In that case:

=fv(4%/365, 5*365, 0, -5000)

A difference of nearly $24 ;-).
 
T

tikchye_oldLearner57

thanks joeu2004 :)
--
oldLearner57


[email protected] said:
Equivalently:

=fv(4%, 5, 0, -5000)

However, that assumes only annual compounding. That would be
appropriate if 4% is the APY. But if it is the nominal rate and if the
OP is talking about a savings account in the US, we might expect daily
compounding at the rate of 4%/365. In that case:

=fv(4%/365, 5*365, 0, -5000)

A difference of nearly $24 ;-).
Click to expand...
 
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