ANNUITIES

Author: Stephen Nelson
Source: download

If you have Microsoft Excel you have (or just run on other popular spreadsheet program) to your computer, you can use the FV function to the future value of 401 (k prognosis) or 403 (b) calculated account.The FV Function to change the future value of an investment, given the interest rate, the number of payments, payment, the current value of investments, and, where appropriate, the type of pension. (For more information on the type-of-annuity switch a little 'later.) The function uses the following syntax: = FV (rate, NPER, PMT, PV, type) This little bit complicated, I admit. But if the future value of a 401 (k), calculated, or 403 (b) account, was already in it's $ 10,000 and to which you and the employer's contributions are $ 200 per month. Beside her sat the buoyancy account valuein future 25 years is expected to receive annually 10% interest.To calculate the future value of this account, type the following in a cell: = FV (10% / 12, 25 * 12 , -200, there -10000.0) The function of the value 385936.13roughly $ 386,000 handful dollars.A of things to note: In order to convert the annual interest, variable annuities, of 10% to a monthly interest rate, the formula divides the annual interest rate of 12 may also convert the 25-year tenure a period during the month, the formula multiplies 25 by 12.Also Note that the monthly payment and initial values found show negative amounts because they represented outflows, variable annuities, . And the function returns the future value amount as a positive value because it reflects cash flow Finally receive.That 0 at the end of the type of pension should be replaced. If you are the type-of-annuity switch to 1, Excel assumes payments occur at the beginning of the period (months) in this case, the pension, because after the convention. If you set the annuity switch to 0 or you omit the argument, Excel assumes payments occur at the end of the period following the annual convention of pensions. Author Stephen L. Training LLC Nelson has written more than 150 books. A former associate professor of taxation at Golden Gate nation's largest tax Universitythe Graduate School Nelson is also the author of QuickBooks for Dummies.Copyright until 2006 by Stephen L. Nelson, CPA. You can reach him at http://www.llcsexplained.com