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Punjabi Mathematician Punjabi Mathematician is offline
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Quote:
Originally Posted by AdmiralAJ View Post
I'm working on a trying to set up a formula for services where the cost increases 6% every 3 years over the next 15 years. The standard FV function doesn't seem to be the right formula because its based on annual compounding.

Anyone have a good formula for what I'm trying to achieve? See my data below:

Year 1 $100,000.00
Year 2 100,000.00
Year 3 100,000.00
Year 4 106,000.00 6% increase over prior year
Year 5 106,000.00
Year 6 106,000.00
Year 7 112,360.00 6% increase over prior year
Year 8 112,360.00
Year 9 112,360.00
Year 10 119,101.60 6% increase over prior year
Year 11 119,101.60
Year 12 119,101.60
Year 13 126,247.70 6% increase over prior year
Year 14 126,247.70
Year 15 126,247.70
TOTAL $1,691,127.89



Thanks...AJ

A = 100,000

i = 6% = 0.06

x = 1+i = 1.06

n = 15

p = 3

t = 15/3 = 5

FV = A * p * (x^t - 1)/(x - 1)

FV = 100,000 * 3 * (1.06^5 - 1)/(1.06 - 1)

FV = 300,000 * (1.3382255776 - 1)/0.06

FV = 300,000 * 0.3382255776/0.06

FV = 300,000 * 5.63709296

FV = 1,691,127.89


"There exist a closed-form formula for just about anything out there in the Universe" - A Village Idiot from Punjab