NPER - Retirement Example

  • Thread starter Thread starter Guest
  • Start date Start date
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Guest

All,

I'm trying to calculate how many months I could draw on my retirement funds.
Here's the example:

Present Value of Fund: 900,000
Amount deducted each month: 6,000
Expected rate of return on investment: 10%

I tried to use NPER = (.10/12, -6000, 900000) but get an error. If I make
both signs negative, I get 111, which I know the answer should be bigger.

Thoughts?
 
If the expected rate of return is 10% then the first month you will make as
interest 7500 (900K*10%*1/12)

and what you deduct is only 6000

Therefore you will never exhaust you funds infact they will keep growing.

That is why you get an error as period is = infinity

however using a 4% return and using the following formula I get the CORRECT
result of 208 months

=NPER(4%/12,-6000,900000)
 
I should have realized. Thanks for the answer. Sometimes the obvious
answers are the hardest to come by.
 
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