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Request for Assistance - financial mathI was told the formula for determining the aggregate of 40 annual payments growing at a compounded rate of 5% is: [Y1 amount]*(1.05)^40. Using that formula (with the Y1 amount being $1,400) would give a figure of . . . what? Thanks in advance . . . not sure this is trigonometry! |

it's not even remotely trigonometry just plug Y1 into your formula and punch some buttons on your calculator. $(1400)\times (1.05)^{40}$ |

Quote:
Future value of periodic payments ...http://keisan.casio.com/has10/mimete...\\%3Cbr%20/%3E variables defined at the online calculator link ... Future Value of Periodic Payments Calculator - High accuracy calculation |

That's quite helpful, skeeter! |

Your post is unclear. Are you looking for the future value of an annual payment of 1,400? If so: FV = 1400[(1.05)^40 - 1] / .05 = ~169119.68 Bank-statement-wise, it'll look like diss: Code: `YEAR DEPOSIT INTEREST BALANCE` |

What I am looking for is the sum/aggregate of 40 annual amounts. The first year's amount is \$1,400, and the next 39 payments will be of amounts that are 5% increases over the prior year's amount. In other words, the second year's amount would be (\$1,400 + 5% growth), and the third year amount would be that amount plus 5% growth. It's a sum of figures assuming a compound growth rate of 5% over 40 years. I think the calculator skeeter posted a link to: Future Value of Periodic Payments Calculator - High accuracy calculation answers that question. |

Thanks Denis. My post was unclear. I'm just looking for the sum of forty different figures. The first is 1,400. The second is 1,470 (1,400 plus 5%). The third is (1,470 x 1.05). And so on . . .. Each of the 40 figures will be 5% larger than the previous one. Thx. |

Quote:
$\displaystyle 1400 + 1400(1.05) + 1400(1.05)^2 + \, ... \, + 1400(1.05)^{39} = 1400 \sum_{n=0}^{39} (1.05)^n = 169119.68$ |

Well Ferd, was that problem given to you in math class? If you LOOK at the representation I gave you, you'll see 1400 + 0 = 1400 1400 + 70= 1470 1400 + 143.50 = 1543.50 ....and so on... If you did not recognize that as what you're after, then ya better have a talk with your teacher. Edit...ahhh, I see Skeeter agrees! Thanks buddy!! Hope Canada beats USA (World hockey Jr.'s) tonight!! |

Thanks skeeter. Does it make sense that the ~169,111 value was derived using BOTH the "a finite geometric series with common ratio" method AND the method that you linked to yesterday ("Future value of periodic payments" -- Future Value of Periodic Payments Calculator - High accuracy calculation). The value Denis derived also was ~169,111. I like the consistency. Maybe these are the same formula and it just goes by different names? Thx. |

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