SAVING Function

Returns the future value of a periodic saving.

Category:

Financial

Syntax

SAVING(f,p,r,n)

Required Arguments

f

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

Range

f ≥ 0

p

is numeric, the fixed periodic payment.

Range

p ≥ 0

r

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

Range

r ≥ 0

n

is an integer, the number of compounding periods.

Range

n ≥ 0

Details

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

\begin{matrix} f = \frac{p (1 + r) ({(1 + r)}^{n} - 1)}{r} \end{matrix}

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.

Example

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.