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Investing/Strategies / Retirement Investing
|Subject: Re: Formula to Calculate Growth||Date: 3/13/2002 4:53 AM|
|Author: ptheland||Number: 33986 of 75383|
2nd) (and the one that I am trying to find a formula for) Suppose that I start an IRA with an initial investment of $1000 and every year I add $3000 more to it. What formula can I use to determine how much the IRA will be worth in a certain number of years given an expected rate of return.
You're looking for the future value of an annuity, which gets a little messier. One formula is:
where r is the expected rate of return (per period) and n is the number of periods.
That will work for the $3000 annual additions. Then you'll need to add in the value of your initial contribution of $1000 figured from the formula given to you earlier.
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