Future value of compounding interest savings

[Blue Bagger]

Hello again

I am having some trouble rearranging the formula used for determining the FUTURE VALUE of an investment.

The question I need to work out is:
How much needs to be deposited at the end of each month to get the future value of $$63123.85, assuming a zero starting
balance, an interest rate of 6%pa and a 4 year timeframe.

The equation I am trying to rearrange is FV = P(1 + i)^n

I need to find P but dont seem to be on the right track.

Any help would be appreciated. Thanks.

 

[Deleted member 4993]

Hello again

I am having some trouble rearranging the formula used for determining the FUTURE VALUE of an investment.

The question I need to work out is:
How much needs to be deposited at the end of each month to get the future value of $$63123.85, assuming a zero starting
balance, an interest rate of 6%pa and a 4 year timeframe.

The equation I am trying to rearrange is FV = P(1 + i)^n

I need to find P but dont seem to be on the right track.

Any help would be appreciated. Thanks.

You want to use FV = P(1+i)^n

why did you decide to use that equation?

 

[Harry_the_cat]

If you are making regular payments at the end of each month, you need to use a formula for annuities.
The formula you have quoted will find the FV of a single amount.

 

[Blue Bagger]

You want to use FV = P(1+i)^n

why did you decide to use that equation?

Thanks for the reply, Subhotosh,

I used the equation as it wa the one given in our lecture notes. I can’t quite ’see’ what the result should be so don’t really know which equation to use or if the components of the equation are the right ones to get me the correct result in the end.

I did some internet search but that only confused me as people seemed to be suggesting different solutions.

I am not naturally a maths person so really have to nut my way through things and this has got me a little stumped.

 

[Deleted member 4993]

Thanks for the reply, Subhotosh,

I used the equation as it wa the one given in our lecture notes. I can’t quite ’see’ what the result should be so don’t really know which equation to use or if the components of the equation are the right ones to get me the correct result in the end.

I did some internet search but that only confused me as people seemed to be suggesting different solutions.

I am not naturally a maths person so really have to nut my way through things and this has got me a little stumped.

Have you been taught any formula where periodic payments are made as opposed to lumpsum (like annuity, mortgage, etc.)?