I encountered an online SWP calculator that shows the future value of the lump-sum amount that we withdraw at a specific rate. But I didn't know it would be this difficult to make one calculator in excel, and require help for the same.
I found online that the formula is below:
A = PMT ((1+r/n)nt – 1) / (r/n))
Breaking them down:
A: This is the future value of an investment. In simple terms, this is the value of a current asset based on an estimated growth rate.
PMT: PMT is a payment per period in terms of finance.
r: This signifies an annual rate of return.
n: Compound numbers in a given period are denoted by "n."
t: This is the number of periods in which an amount is invested.
But I can't seem to use this formula in excel.
If I use below amount in online calculator, and the same amount in excel formula, I get different results:
Total investment = Rs 1000000
Withdrawal per month = Rs 10000
Tenure (years) = 10
Expected return = 8%
Final Amount = Rs 3,57,682
Now if in excel I do this:
PMT = 1000000
r = 8
n = 1 (since 1 means yearly, 4 means quarterly, and 12 means monthly)
t = 10
(not sure where to enter withdrawal per month amount).
Then I am getting A = 1,01,25,000 (crore :O)
Any help is appreciated. Online calculator: SWP Calculator: Systematic Withdrawal Plan Calculator
I found online that the formula is below:
A = PMT ((1+r/n)nt – 1) / (r/n))
Breaking them down:
A: This is the future value of an investment. In simple terms, this is the value of a current asset based on an estimated growth rate.
PMT: PMT is a payment per period in terms of finance.
r: This signifies an annual rate of return.
n: Compound numbers in a given period are denoted by "n."
t: This is the number of periods in which an amount is invested.
But I can't seem to use this formula in excel.
If I use below amount in online calculator, and the same amount in excel formula, I get different results:
Total investment = Rs 1000000
Withdrawal per month = Rs 10000
Tenure (years) = 10
Expected return = 8%
Final Amount = Rs 3,57,682
Now if in excel I do this:
PMT = 1000000
r = 8
n = 1 (since 1 means yearly, 4 means quarterly, and 12 means monthly)
t = 10
(not sure where to enter withdrawal per month amount).
Then I am getting A = 1,01,25,000 (crore :O)
Any help is appreciated. Online calculator: SWP Calculator: Systematic Withdrawal Plan Calculator