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future value
a couple is saving $ in one account. husband puts 1000 into the account every two monthswife puts 500 into every two months toobut thier payments do not overlap, they alternatively pay every two months for 5 years.so a glance at the cashflows is like this1000 500 1000 500 1000 500 .......jan feb mar apr may junewhat is the future value after 5 years? Thank you
future value
Hmmm, Well I think it's something like this, unless I'm missing something major:Sum over the 1000's payments with appropriate interest, plus the same for the 500's, so:This assumes that you only get interest on januray's money in feb. (increment the power by +1 to get interest for the whole month).This works out as $52371 (or $52720.3)I think....
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- energydude
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future value
= 52632.876Discount 500 one month backwards and then just do a geometric sum for periods given by t = 2n, n = 1 to 30.
future value
Another fun way to do this is using a financial calculator and recognizing that there is an embedded annuity of $500 every month. Calculate the future value (FV) of this, assuming deposits are made at the beginning of each month. The FV of the entire series of deposits is:FV + FV/(1/(1.005)+1)Answer is, as others have said: $52,632.87551Just a neat way to get the solution on a financial calculator.Mike
future value
It would be also good to take in consideration when was the first deposit done, if it was on period zero the FV would be $52,632, if it would be done on period one $52,371