Lux Investing
How do you calculate the total sum from an investment stream?
Mr. Green wishes to invest $150 per month in a bank that will pay him interest monthly. The annual percentage interest rate offered by the bank for investment streams is 8.4%. If Mr. Green invests $150 each month for the next ten years, how much money will he have in the bank at the end of then years? Would appreciate an explanation rather than just a figure as I can't seem to be able to get the formula quite right. Thanks!
Public Comments
- This is an annuity and you want to know the future value. This is the formula to use. FVoa = PMT [((1 + i)n - 1) / i] FVoa = Future Value of an Ordinary Annuity PMT = Amount of each payment 150 i = Interest Rate Per Period 8.4 n = Number of Periods 10
