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Function for decreasing salary by 2.5%
I get salary information for 2005. I want to take that salary back in time
for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
To get back to your 44,863 value you have to divide 43,742 by .975.
The reason being 2.5% of 43,742 is not the same as 2.5% of 44,863. To go back 5 years use the formula =44,863*(1-.025)^5 -- Regards, Dave "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
Actually, I want the result (x), when multiplied by 2.5% to equal 44,863.
And then for the previous year I want the result when multiplied by 2.5% to equal x. And so on for the five years. "David Billigmeier" wrote: To get back to your 44,863 value you have to divide 43,742 by .975. The reason being 2.5% of 43,742 is not the same as 2.5% of 44,863. To go back 5 years use the formula =44,863*(1-.025)^5 -- Regards, Dave "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
Alright here's a generic example that I'm hoping you can apply to your
problem because I'm a little confused on what you need. Assume your salary this year (2005) is 50,000. Also assume you're salary has increased exactly 2.5% each year for the last 5 years. Here are the formula's and your salary's for the previous 5 years: 2004: =50,000*(1-.025)=50,000*.975=48,750 2003: =48,750*(1-.025)=48,750*.975=47531.25 2002: =47531.25*(1-.025)=47531.25*.975=46342.97 2001: =46342.97*(1-.025)=46342.97*.975=45184.39 2000: =45184.39*(1-.025)=45184.39*.975=44054.78 You can also see that 50000*(1-.025)^5=44054.78 which is what we got in 2000 by taking each year step by step. Does that make more sense? -- Regards, Dave "Julie" wrote: Actually, I want the result (x), when multiplied by 2.5% to equal 44,863. And then for the previous year I want the result when multiplied by 2.5% to equal x. And so on for the five years. "David Billigmeier" wrote: To get back to your 44,863 value you have to divide 43,742 by .975. The reason being 2.5% of 43,742 is not the same as 2.5% of 44,863. To go back 5 years use the formula =44,863*(1-.025)^5 -- Regards, Dave "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
I am sorry. In talking with my partner, I realize that I misstated what we
want. We want to find the yearly amount that if increased by 2.5% over each of the five years will equal our target figure. So, using your example, 2004: =50,000 2003: =48,780*2.5%=49,999.50 rounded to 50,000 2002: =47,590*2.5%=48,779.75 rounded to 48,780 and so on. We are doing this manually, trial by error. "David Billigmeier" wrote: Alright here's a generic example that I'm hoping you can apply to your problem because I'm a little confused on what you need. Assume your salary this year (2005) is 50,000. Also assume you're salary has increased exactly 2.5% each year for the last 5 years. Here are the formula's and your salary's for the previous 5 years: 2004: =50,000*(1-.025)=50,000*.975=48,750 2003: =48,750*(1-.025)=48,750*.975=47531.25 2002: =47531.25*(1-.025)=47531.25*.975=46342.97 2001: =46342.97*(1-.025)=46342.97*.975=45184.39 2000: =45184.39*(1-.025)=45184.39*.975=44054.78 You can also see that 50000*(1-.025)^5=44054.78 which is what we got in 2000 by taking each year step by step. Does that make more sense? -- Regards, Dave "Julie" wrote: Actually, I want the result (x), when multiplied by 2.5% to equal 44,863. And then for the previous year I want the result when multiplied by 2.5% to equal x. And so on for the five years. "David Billigmeier" wrote: To get back to your 44,863 value you have to divide 43,742 by .975. The reason being 2.5% of 43,742 is not the same as 2.5% of 44,863. To go back 5 years use the formula =44,863*(1-.025)^5 -- Regards, Dave "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
On Thu, 8 Sep 2005 09:23:04 -0700, "Julie"
wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) So, the salary has been increasing by 2.5% each year and is now 44,863. You'd like to know what the salary has been for each of the past five years. You get that by dividing 44,863 by 1.025, which would equal 2004's salary. last year = 44863/1.025 = 2004 2003 = 2004/1.025 2002 = 2003/1.025 etc. Jim |
Bless you! We feel like idiots.
"Jim Dornbos" wrote: On Thu, 8 Sep 2005 09:23:04 -0700, "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) So, the salary has been increasing by 2.5% each year and is now 44,863. You'd like to know what the salary has been for each of the past five years. You get that by dividing 44,863 by 1.025, which would equal 2004's salary. last year = 44863/1.025 = 2004 2003 = 2004/1.025 2002 = 2003/1.025 etc. Jim |
Hi Julie...........
It's great that you have a solution that you are happy with. But, just for the record, this type problem can easily be solved by none other than the "Solver" function. In A1:A6 put 2000 through 2005. In B2 put =B1*1.025 and copy down to B5. In B6 put 44863, then click on B6 and run Tools Solver to show "exact value of 44863" "by changing B1".......it will blow the whole thing out for you....... Vaya con Dios, Chuck CABGx3 "Julie" wrote in message ... I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) |
Hi. Just another option:
Last year: =PV(2.5%,1,0,-44863) Answer: $43,768.78 Which is the same as = 44863/1.025 Five years ago: =PV(2.5%,5,0,-44863) -- Dana DeLouis Win XP & Office 2003 "Julie" wrote in message ... Bless you! We feel like idiots. "Jim Dornbos" wrote: On Thu, 8 Sep 2005 09:23:04 -0700, "Julie" wrote: I get salary information for 2005. I want to take that salary back in time for five years by decreasing the amount by 2.5% per year. When I use the formula 44,863*(1-0.025) I get 43,742. But when I multiply 43,742 by 2.5% I get 1093.55. That number added to 43,742 is 44,836 (rounded), not 44,863. What am I doing wrong? (I submitted this question last night, but I cannot locate it anywhere and have not been notified of any replies, so I may or may not have submitted it properly. If duplicated elsewhere please excuse.) So, the salary has been increasing by 2.5% each year and is now 44,863. You'd like to know what the salary has been for each of the past five years. You get that by dividing 44,863 by 1.025, which would equal 2004's salary. last year = 44863/1.025 = 2004 2003 = 2004/1.025 2002 = 2003/1.025 etc. Jim |
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