SAVING

SAVING

Returns the future value of a periodic saving

Category: Financial

Syntax
Arguments
Details
Examples

Syntax

SAVING(f,p,r,n)

Arguments

f

is numeric, the future amount (at the end of n periods).

Range:

p

is numeric, the fixed periodic payment.

Range:

r

is numeric, the periodic interest rate expressed as a decimal.

Range:

n

is an integer, the number of compounding periods.

Range:

Details

The SAVING function returns the missing argument in the list of four arguments from a periodic saving. The arguments are related by

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One missing argument must be provided. It is then calculated from the remaining three. No adjustment is made to convert the results to round numbers.

Examples

A savings account pays a 5 percent nominal annual interest rate, compounded monthly. For a monthly deposit of $100, the number of payments that are needed to accumulate at least $12,000, can be expressed as

number=saving(12000,100,.05/12,.);

The value returned is 97.18 months. The fourth argument is set to missing, which indicates that the number of payments is to be calculated. The 5 percent nominal annual rate is converted to a monthly rate of 0.05/12. The rate is the fractional (not the percentage) interest rate per compounding period.

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