Sep IRA Calculator 2020 i-it's just to talk well that blue peacoat computer training and in this video we're going to look at how to use the future value function and the, context of this is we want to find out what the future value of our retirement fund will be so this will be based on an assumed interest rate over. The period of investment a.

Constant interest rate and on also all constant payments into our retirement fund so got some literature from retirement fund and it tells us that it assumes inflation, will be 2.5% and it assumes also that above inflation is going to achieve two, point three four percent so that gives me an assumed growth of four point eight four obviously we want to, see what IRA Tom will fund will be worth in the future bearing in mind and considering inflation so we're going to base our rate on this figure here not the. Total assumed growth now we've got our right there but we do need to work out what, the rate is per month because we will be making monthly payments into our retirement so we just divide that. By 12 to get our monthly interest rate the number of periods that's the number of months between now and our retirement date and I'm going. To use date diff to calculate.

That so they differ quite a start date now got a hard code in today's date for that.

So today's date being the third of September 2019 and then the end date is date or retirement and I want to return the number of months 259 months now the payment, you have to enter as a negative value that's the.

Monthly payment you're going to make into your retirement fund and for this one we're going to say 650 so make sure you put that in, as a negative value now the present value you don't have to, specify this but if you you have a lump sum that you're putting in to your retirement that would, be the present value it could be zero you maybe start from scratch or you may have an. Investment that you're putting straight into your retirement all you already have an amount within your retirement fund so let's say for it–and so you could put in. We've got thirty five thousand in to put it straight into our retirement fund so now we have all the information we need to work out. The future value so the user function called, FV future value and the first argument is the rate argument which is our rate per period the second argument. Is in number of payment periods 259 we've calculated up there the next argument payment that's the payment you're going, to make per month come on present value you can see the square brackets around that name it means it's non-mandatory or we do have a starting point their investment of 35,000 type, is also non mandatory it.

Defaults to zero and a period that's basically specifying when you're making the 650-pound payment is at the beginning of the month, or the end of the month so if we say into the month zero that is in fact the defaults and don't need to specify if we can use the default and there we are there, is the future value of our fund based on these assumptions obviously with, the retirement fund that's never going to be the exact amount because our growth will be based on stocks and shares and inflation will change. Over time but it gives you a good idea of the future value of an investment it may not be a retirement fund.

It may be irregular play payments, into a saving account and you could use the same kind of information for that calculation as well now what I want to do here is to track the performance of my. Investment so I've listed. All the quarter ends I get caught and reports from the retirement fund to tell me how much my retirement is worth and I just want to track the, performance against the specified growth expectations that they've given me so here are all the quarter ends in here are the number of months between now.

And that quarter end so future value would, do this calculation for me so the rate is over here rate per period I need to fix that because I'm copying the formula down and per the number of payments well that will be this. Value here which won't be, fixed because each refer to these values I'll copy down payment is the payments are going to make each period I need to fix that as well former, present value is the current investment for for that as well to fix it and I'm going to make payments at the end of the. Month so I don't need to use that last argument.