compound

[Guest]

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

 

[RWN]

5,000 * 1.04^5

 

[joeu2004]

5,000 * 1.04^5

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 ;-).

 

[Guest]

thanks RWN for the solution, that was cool

 

[Guest]

thanks joeu2004
--
oldLearner57

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 ;-).