Microsoft Office Tutorials and References

In Depth Information

**Using FV to Estimate the Future Value of a Regular Savings Plan**

type
—
This is either 0 or 1 to indicate when payments are due. The de-

fault value of 0 assumes that payments are due at the end of the

period. A value of 1 means the payments are due at the beginning of

each period.

In
Figure 13.5
,
the NPER function in cell B5 estimates how many months you

can withdraw the amount in cell B2. Note that the monthly withdrawal is neg-

ative from the point of view of the retirement account.

•
type

Figure 13.5.

Figure 13.5.
Use

Use NPER

NPER to figure out how long an annuity can pay out before it

to figure out how long an annuity can pay out before it

ends in a zero balance.

ends in a zero balance.

Using

Using
FFV
to Estimate the Future Value of a Regular Savings Plan

to Estimate the Future Value of a Regular Savings Plan

The future value calculation assumes that you will make regular monthly

payments to a savings plan every month. It also assumes that the interest

rate does not change throughout the life of the savings plan. If you are

young, it is likely that you can save more as your income grows later.

However, using the savings calculator in
Figure 13.6
helps you to realize

the value of regular savings.