This Formula Calculator calculates the future value of series of payment that increase at a constant rate with the first payment at the end of period 0.
Formula: fv(fcRate / 100, fcNPer, 0, -pv((1 + fcRate / 100) / (1 + fcGrowth / 100) - 1, fcNper, fcPmt, 0, 1), 0)
FV / fcFv : The future value.
N / fcNper : The number of periods.
i% / fcRate : The periodic rate.
PMT / fcPmt : The base periodic payment at the beginning of period zero. This payment increases by g% each period.
g% / fcGrowth : The periodic growth rate of the payment.
"You are considering the purchase of an investment that will pay $1,000 after one year, and then 4 additional payments that grow at a rate of 3% per year to account for expected inflation. If your required return is 8% per year, what is the future value of this investment?"
(Graduated Annuities Using Excel - TVMCalcs.com)
|5||N||5.00||Stores the N value.|
|8||i%||8.00||Stores the i% value.|
|-1000||PMT||-1,000.00||Stores the PMT value.|
|3||g%||3.00||Stores the g% value.|
|FV||6,201.08||Calculates the future value.|