2006-07-25 09:13:19 · 7 answers · asked by alliance_us 1 in Business & Finance ➔ Personal Finance
Actually you would have accumulated $224,585.92
This is an annuity problem for a future value. The formula is as follows:
FV = Pmt [ [ 1 + Rate of Return]raised to the power of the term - 1 ] / rate of return. In your scenario this would be the formula to calculate the Future Value.
Pmt: $150
Term 240 (20 years x 12 months)
Rate: .15
FV= 150 [1 + .0125]240 -1 / .0125 ** .0125 is 15% / 12
FV= 150 [19.7156 -1 ] / .0125
FV= 150 [18.7156}/ .0125
FV=150 [1,497.2396]
FV= $224,585.92
Much easier to work on an spread sheet or business calculator, but the answer is the same... much less than millions.
2006-07-25 09:55:04 · answer #1 · answered by Adios 5 · 0⤊ 1⤋
Hasn't the stock market done 13% for like 100 years?
check out http://personal.fidelity.com/toolbox/growth/growth.shtml
$150 a month for 20 years at 15% compounded yearly is $212,058
2006-07-25 09:20:08 · answer #2 · answered by kvuo 4 · 0⤊ 0⤋
That sounds about right, but 15% is a rate that won't last 20 years. More like 20 hours!
2006-07-25 09:17:56 · answer #3 · answered by Steve 7 · 0⤊ 0⤋
About $200,000. Interest rate of 15% for 20 years isn't realistic.
2006-07-25 09:45:41 · answer #4 · answered by davidosterberg1 6 · 0⤊ 0⤋
That's true but what that guru isn't telling you is that 15% anual return for 20 straight years is highly improbable :)
Rival
2006-07-25 09:16:16 · answer #5 · answered by Rival 3 · 0⤊ 0⤋
Yeah I know few places where u get 15% compound interest for 20 yrs! ......... Its call SCAM
2006-07-25 09:23:53 · answer #6 · answered by Ted 4 · 0⤊ 0⤋
What the hell will pay 15% intrest steady for 20 years!??!?!
2006-07-25 09:17:15 · answer #7 · answered by Anonymous · 0⤊ 0⤋