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Note: This was posted also on the Retire Early board

I have a question about the Excel 95 financial functions. It seems that the the FV (future value function) seems to be the best source of calculating the future value of retirement savings.

For instance:

Saving 500/month for 16 years and earning 12 percent interest (historical avarage of stock market). ZERO saved at this point.

The formula is: FV(rate, nper, pmt, pv, type)

So I would input: fv(12%/12, 16*12, -500, 0, 0)

The formula results in: \$287,811

If 80,000 was saved at this point, the inputs would be:
fv(12%/12, 16*12, -500, -80000, 0) resulting in a much larger value of: \$828,309

Is my use of the FV formula correct, and if not, could someone point out my errors/omissions? I choose to ignore taxes.

If my use is correct, then the PV formula would give the present value of the savings in today's dollars. For instance using a 3 percent inflation rate:
pv(3%/12, 16*12, 0, -828309, 0) equals \$512,850.

The reason why I ask, is that the various savings/retirement calculators on the web, give widely varying results.

Thank you,

Scott

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