标题: Maturity value question [打印本页] 作者: DarienHacker 时间: 2013-4-16 09:41 标题: Maturity value question
Investment amount 10,000
Expense ratio 1.5%
Term 25 years
CAGR 12%
What is the maturity amount? Can anyone help me with the formula to determine this? It seems the answer is 116508.16作者: ruchita 时间: 2013-4-16 09:41
10,000 x (1.00 + .12 .015)^25
Although the answers do not match.
N 25
I/Y 10.5
PMT 0
PV 10,000
CPT FV
I get 121,354 for both作者: spartanag07 时间: 2013-4-16 09:42
It seems 116508.16 is arrived at as follows:
Actual Return = (1 + .12) * (1 .015) 1 = .1032 or 10.32%
Answer = 10000*(1+.1032)^25 = 116508.16
Any thoughts on whether this is correct?作者: kasinkei 时间: 2013-4-16 09:42
Your 12% return is cut by 1.5% of fees, so 1.12*0.985= 1.1032, i.e., 10.32%.
Another way of looking at it:
($10,000*(1.12)) 0.015 * ($10,000*(1.12)) = first year amount, simplify:
= $10,000*(1.12) (1 0.015)
= $10,000*(1.12) (0.985)
After 25 years, it is:
$10,000*(1.12)^25 * 0.985^25
