SAVING Function

Returns the future value of a periodic saving

Category: Financial

Syntax

SAVING ( f,p,r,n )

Arguments

f

• is numeric, the future amount (at the end of n periods).

• Range: f ‰

p

• is numeric, the fixed periodic payment.

• Range: p ‰

r

• is numeric, the periodic interest rate expressed as a decimal.

• Range: r ‰

n

• is an integer, the number of compounding periods.

• Range: n ‰

Details

The SAVING function returns the missing argument in the list of four arguments from a periodic saving. The arguments are related by

One missing argument must be provided. It is then calculated from the remaining three. No adjustment is made to convert the results to round numbers .

Examples

A savings account pays a 5 percent nominal annual interest rate, compounded monthly. For a monthly deposit of $100, the number of payments that are needed to accumulate at least $12,000, can be expressed as

 number=saving(12000,100,.05/12,.); 

The value returned is 97.18 months. The fourth argument is set to missing, which indicates that the number of payments is to be calculated. The 5 percent nominal annual rate is converted to a monthly rate of 0.05/12. The rate is the fractional (not the percentage) interest rate per compounding period.