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THE LOGIC OF MONEY

EFFECTIVE ANNUAL RATE (E.A.R.) CALCULATOR

ANNUAL INTEREST RATE = i COMPOUNDING N PERIODS / YEAR = m EFFECTIVE INTEREST RATE / PERIOD = i / m EFFECTIVE ANNUAL RATE (T.A.E. in Spain)
EFFECTIVE ANNUAL RATE = E.A.R. ANNUAL INTEREST RATE

4.00% 4 1.00% 4.06% 4.00% 3.94% 1.040604 1.040604

one dollar compounded m times per year at rate i equivalent amount using the effective annual rate

ANNUITY CALCULATOR (end of period cash flows)

ANNUITY ANNUAL INTEREST RATE PRESENT VALUE FUTURE VALUE PERIODS IN YEARS (using future value) PERIODS IN YEARS (using present value)

25,000 6.00% 139,559.54 209,845.94 7 7

(E.A.R.) CALCULATOR input input input output

ANNUITY CALCULATOR (end of period cash flows)

ANNUITY PERIODS ANNUAL INTEREST RATE PRESENT VALUE FUTURE VALUE PERPETUITY - PR. VALUE

input output

output output

of period cash flows) input input input input output output

PRESENT, FUTURE VALUE CALCULATOR (end of period cash flows

PRESENT VALUE FUTURE VALUE PERIODS ANNUAL INTEREST RATE PRESENT VALUE FUTURE VALUE

UITY CALCULATOR (end of period cash flows)

ANNUITY CALCULATOR (end of period cash flows)

3,000 20 1.00% 54,136.66 66,057.01

input input input output output

PERIODS ANNUAL INTEREST RATE PRESENT VALUE FUTURE VALUE PERPETUITY - PR. VALUE ANNUITY (from present value) ANNUITY (from future value) ANNUITY (from perpetuity)

300,000.00 output

TURE VALUE CALCULATOR (end of period cash flows)

80,000.00

input

276,704.11 input 20 input 6.00% 86,277.65


input output

256,570.84 output

Y CALCULATOR (end of period cash flows)

30 0.00%

input input

180,000.00 input 180,000.00 input 1,000.00 6,000 6,000 0


input output output output

THE LOGIC OF MONEY

VIEW THIS SHEET AT 80% TO GET THE OVERA

money inputs

Initial Amount Invested Annual Rate of Return (%) Number of Years Invested

30,000 10% 20 201,825 131,186

USD

outputs

Final Amount Received


35%

USD

Net of Taxes (35%)

USD

Income Tax Rate

Growth of Initial Amount Inve


250,000

200,000 $ Investment Value

Explanations
150,000

and Suggestions for approaching

100,000

Retirement Money

50,000

30,000 33,000
0 1 2

36,300 3

39,930 4

43,923
5

48,315 6

Source of Table: Historical Annual Returns For The S&P 500 Index. X Back to Top

website link to table in september 2012: http://www.istockanalyst.com/article/viewarticle/articleid/280 30,000 33,000 36,300 39,930 43,923 48,315 53,147 58,462 64,308 0 1 2 3 4 5 6 7 8

INPUT TABLE FOR GRAPH PLEASE DO NOT CHANGE

70,738 77,812 85,594 94,153 103,568 113,925 125,317 137,849 151,634 166,798 183,477 201,825 222,007 244,208 268,629 295,492 325,041 357,545 393,300 432,630 475,893 523,482 575,830 633,413 696,755 766,430 843,073 927,380 1,020,118 1,122,130 1,234,343 1,357,778 1,493,555 1,642,911 1,807,202 1,987,922 2,186,715 2,405,386 2,645,925 2,910,517 3,201,569 3,521,726

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

THIS SHEET AT 80% TO GET THE OVERALL, ONE AT A GLANCE VIEW.

You can change the amount invested, the annual rate of return, and the years invested. The amount invested is also known as c

The amount invested initially is also called the Present Value of your money, how much your money is worth today.

The rate at which your money grows. Choose 2%, 5% for Bond Yields, 5%, 10% or so, for stocks or stock indices over 20 years, as The rate is a percentage, it is the part of your initial investment that accumulates during each period, each year during whic

On Year 2, the new amount invested, $33.000, is the initial amount invested $30.000 plus interest, $3.000, $30.000*10% (

The final amount after 20 years is also called a Future Value, it is defined like this: Final Amount Received = (Initial Amount Writing this same formula with different names, we get the formula found in books: Future Value = FV = Present Value (PV) *

Growth of Initial Amount Invested - over 20 years at 10% annual compounded interest

53,147
7

58,462
8

64,308

70,738

77,812

85,594

94,153

103,568

113,925

10

11

12

13

14

Years

Youd want to take into account these two columns, a twenty year average of a and look at the row titled 2007, the one that has the most recent information on

Based on columns 3 and 7, of the row titled 2007, the last y Returns average 10% or so, on average, annually, when yo 10.36% annual return on average, and over an average per

COLUMN 3

ckanalyst.com/article/viewarticle/articleid/2803347

ears invested. The amount invested is also known as capital, your initial wealth, an asset, it can generate more money if well invested.

y, how much your money is worth today.

Press To S&P index return table.

0% or so, for stocks or stock indices over 20 years, assumes reinvestment at this rate. Press button to see the S&P index return table. accumulates during each period, each year during which your money is invested. raised to the power of the Number of Years invested

nvested $30.000 plus interest, $3.000, $30.000*10% (10% is the Annual Rate of Return).

Final Amount Received = (Initial Amount Invested) * (1+Annual Rate of Return)^(Number of Years Invested) Future Value = FV = Present Value (PV) * (1+r)^(n)
in this spreadsheet, input in %, as in 10% annual rate of return, not as the equivalent, 0.1

201,825

113,925

125,317

137,849

151,634

166,798

183,477

15

16

17

18

19

20

21

account these two columns, a twenty year average of annual returns, and an average annual return since 1968, to 2007, d 2007, the one that has the most recent information on average annual returns of the S&P 500.

d on columns 3 and 7, of the row titled 2007, the last year of information for annual returns of the S&P 500: rns average 10% or so, on average, annually, when you look at a ten year recent period, 2004, 2005, 2006, and 2007. 6% annual return on average, and over an average period of 20 years, the S&P 500 returns 11.81% annually.

COLUMN 7

et, it can generate more money if well invested.

Press To S&P index return table.

Press button to see the S&P index return table. raised to the power of the Number of Years invested

of Return)^(Number of Years Invested)


in this spreadsheet, input in %, as in 10% annual rate of return, not as the equivalent, 0.1

nnual return since 1968, to 2007,

d, 2004, 2005, 2006, and 2007. urns 11.81% annually.

THE MONEY TABLET

money inputs

Initial Amount Invested Annual Rate of Return (%) Number of Years Invested

80,000 7% 20 309,575 201,224

USD

outputs

Final Amount Received


35%

USD

Net of Taxes (35%)

USD

Income Tax Rate

Growth of Initial Amount Inve


350,000 300,000 $ Investment Value
250,000

Explanations and Suggestions for approaching Retirement Money

200,000
150,000

100,000
50,000 0 1 2 3 4 5 6

80,000 85,600

91,592

98,003

104,864

112,204

Source of Table: Historical Annual Returns For The S&P 500 Index. X Back to Top

website link to table in september 2012: http://www.istockanalyst.com/article/viewarticle/articleid/280 80,000 85,600 91,592 98,003 104,864 112,204 120,058 128,463 137,455 0 1 2 3 4 5 6 7 8

INPUT TABLE FOR GRAPH PLEASE DO NOT CHANGE

147,077 157,372 168,388 180,175 192,788 206,283 220,723 236,173 252,705 270,395 289,322 309,575 331,245 354,432 379,242 405,789 434,195 464,588 497,109 531,907 569,141 608,980 651,609 697,222 746,027 798,249 854,127 913,915 977,889 1,046,342 1,119,586 1,197,957 1,281,814 1,371,541 1,467,548 1,570,277 1,680,196 1,797,810 1,923,657 2,058,313 2,202,394 2,356,562

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

You can change the amount invested, the annual rate of return, and the years invested. The amount invested is also known as c

The amount invested initially is also called the Present Value of your money, how much your money is worth today.

The rate at which your money grows. Choose 2%, 5% for Bond Yields, 5%, 10% or so, for stocks or stock indices over 20 years, as The rate is a percentage, it is the part of your initial investment that accumulates during each period, each year during whic

On Year 2, the new amount invested, $33.000, is the initial amount invested $30.000 plus interest, $3.000, $30.000*10% (

The final amount after 20 years is also called a Future Value, it is defined like this: Final Amount Received = (Initial Amount Writing this same formula with different names, we get the formula found in books: Future Value = FV = Present Value (PV) *

Growth of Initial Amount Invested - over 20 years at 10% annual compounded interest

120,058

128,463

137,455

147,077

157,372

168,388

180,175

192,788

206,283

10

11

12

13

14

Years

Youd want to take into account these two columns, a twenty year average of a and look at the row titled 2007, the one that has the most recent information on

Based on columns 3 and 7, of the row titled 2007, the last y Returns average 10% or so, on average, annually, when yo 10.36% annual return on average, and over an average per

COLUMN 3

ckanalyst.com/article/viewarticle/articleid/2803347

ears invested. The amount invested is also known as capital, your initial wealth, an asset, it can generate more money if well invested.

y, how much your money is worth today.

Press To S&P index return table.

0% or so, for stocks or stock indices over 20 years, assumes reinvestment at this rate. Press button to see the S&P index return table. accumulates during each period, each year during which your money is invested. raised to the power of the Number of Years invested

nvested $30.000 plus interest, $3.000, $30.000*10% (10% is the Annual Rate of Return).

Final Amount Received = (Initial Amount Invested) * (1+Annual Rate of Return)^(Number of Years Invested) Future Value = FV = Present Value (PV) * (1+r)^(n)
input in %, as in 10% annual rate of return, it is equivalent to 0.1

309,575 270,395

206,283

220,723

236,173

252,705

289,322

15

16

17

18

19

20

21

account these two columns, a twenty year average of annual returns, and an average annual return since 1968, to 2007, d 2007, the one that has the most recent information on average annual returns of the S&P 500.

d on columns 3 and 7, of the row titled 2007, the last year of information for annual returns of the S&P 500: rns average 10% or so, on average, annually, when you look at a ten year recent period, 2004, 2005, 2006, and 2007. 6% annual return on average, and over an average period of 20 years, the S&P 500 returns 11.81% annually.

COLUMN 7

et, it can generate more money if well invested.

Press To S&P index return table.

Press button to see the S&P index return table. raised to the power of the Number of Years invested

of Return)^(Number of Years Invested)


input in %, as in 10% annual rate of return, it is equivalent to 0.1

nnual return since 1968, to 2007,

d, 2004, 2005, 2006, and 2007. urns 11.81% annually.