Looking for an excel formula that will apply compound interest and will allow me to add a continuous contribution for “x” amount of years.
i.e. $10,000 contribution at 10% yearly interest every year. I contribute $10,000 every year for the next 35 years. What will the account value be?
I believe the
FV() formula would be what you’re looking for.
Keep in mind, there are variations to this formula.
10%assumes you only make one payment a year. If you pay 12 times a year, use
35is the total number of years. This doesn’t change even if you change the above.
-10000is your 10k / year payment
Here’s where it can get interesting. Here are some optional arguments for you:
- Pv: Present Value. (Use if you are starting the account with > $0 in it)
- Type: If the “payment period” is up front of the period, then place a
1here, otherwise omit it)
Here’s an example for $10,000 a year in monthly payments (12/year), using
1 because the payments are at the start of the month(period), not the end.