The fixed amounts must be = $5600 approx from year 4 to 9
A=P*(1+R)^n , you keep using this for your every year investment. Denote the inv. from year 4 to 9 as 'x' and your expected output to be = $60000, solve for x
x=$5600
"You want to put down $6,000 in year 1, $2,000 in year 2, nothing in year 3, and then invest a fixed amount each year from years 4 to 9...."
Future value of the first $6k...if you invest it on day 1, it will be invested for 9 years...
$6,000(1.08^9) = 11,994.03
Future value of the $2k invested in year 2, invested for 8 years...
FV = 2,000(1.08^8) = 3701.86
You need $60k and you'll have $15,695.89 from the above , so you'll need another
60,000 - 15,695.89 = 44,304.11
Assuming you continue to make payments at the beginning of each year, beginning in year 4 thru year 9, that's 6 more payments. Solve for the payment using Future Value annuity DUE formula..."FVad"
FVad = { PMT [((1 + i)^n - 1) / i] } * (1 + i)
44304.11 = {PMT[(1.08^6) - 1)) / 0.08)} * 1.08
44,304.11 / 1.08 = {PMT[(1.08^6) / 0.08)}
41022.32 = PMT[7.33593]
41022.32 / 7.33593 = $5591.97
If each payment is made at the END of each year, the first payment is only invested for 8 years (end of year 1 thru end of year 9), the second payment is only invested for 7 years, and you'd use Future Value ORDINARY annuity "FVoa" to solve for the 6 payments made in years 4 thru 9.
FVoa = PMT [((1 + i)^n - 1) / i]
For "how to" in excel..(ordinary annuity)
http://www.tvmcalcs.com/calculators/exce...
for annuity due in excel...
http://msofficeworld.com/future-value-an...
You want to buy a boat in 10 years. The boat will cost $60,000 in 10 years. You want to put down $6,000 in year 1, $2,000 in year 2, nothing in year 3, and then invest a fixed amount each year from years 4 to 9. What are the fixed amounts from years 4 to 9?
use 8% annual rate
