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Thread: Calculating annual average growth

  1. #1
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    Calculating annual average growth

    Hi, Here are my expenses:

    2017: 1000$

    2018: 1000$

    2019: 1000$

    Yearly Interest rate: 3%
    -----------------------
    Capitalizing the costs above (= Present value terms = PV)

    2017: 1000$/(1+3%)^1 = ~971

    2018: 1000$/(1+3%)^2 = ~943

    2019: 1000$/(1+3%)^3 = ~915

    ------------------------------
    Expenses in 2017-2019 in PV terms = ~2829

    Average expenses in 2017-2019 in PV terms = ~943
    --------------------------------------------------
    My question: Is the average line (~943) correct?

    If any of you are familiar with the PMT function in Excel, Should I use it here instead? if yes, how?

    Thank you in advance,
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  2. #2
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    Re: Calculating annual average growth

    Quote Originally Posted by GIS2017 View Post
    Hi, Here are my expenses:

    2017: 1000\$

    2018: 1000\$

    2019: 1000\$

    Yearly Interest rate: 3%
    -----------------------
    Capitalizing the costs above (= Present value terms = PV)

    2017: 1000\$/(1+3%)^1 = ~971

    2018: 1000\$/(1+3%)^2 = ~943

    2019: 1000\$/(1+3%)^3 = ~915

    ------------------------------
    Expenses in 2017-2019 in PV terms = ~2829

    Average expenses in 2017-2019 in PV terms = ~943
    --------------------------------------------------
    My question: Is the average line (~943) correct?

    If any of you are familiar with the PMT function in Excel, Should I use it here instead? if yes, how?

    Thank you in advance,
    reposted to fix \$ signs
    Last edited by romsek; Mar 19th 2017 at 11:24 PM.
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  3. #3
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    Re: Calculating annual average growth

    Hi, Here are my expenses:

    2017: 1000$

    2018: 1000$

    2019: 1000$

    Yearly Interest rate: 3%
    -----------------------
    Capitalizing the costs above (= Present value terms = PV)

    2017: 1000$/(1+3%)^1 = ~971

    2018: 1000$/(1+3%)^2 = ~943

    2019: 1000$/(1+3%)^3 = ~915

    ------------------------------
    Expenses in 2017-2019 in PV terms = ~2829

    Average expenses in 2017-2019 in PV terms = ~943
    --------------------------------------------------
    My question: Is the average line (~943) correct?

    If any of you are familiar with the PMT function in Excel, Should I use it here instead? if yes, how?

    Thank you in advance,
    Follow Math Help Forum on Facebook and Google+

  4. #4
    MHF Contributor
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    Feb 2015
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    Ottawa Ontario
    Posts
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    285

    Re: Calculating annual average growth

    Quote Originally Posted by GIS2017 View Post
    Here are my expenses:

    2017: 1000

    2018: 1000

    2019: 1000

    Yearly Interest rate: 3%
    -----------------------
    Capitalizing the costs above (= Present value terms = PV)

    2017: 1000/(1+3%)^1 = ~971

    2018: 1000/(1+3%)^2 = ~943

    2019: 1000/(1+3%)^3 = ~915

    ------------------------------
    Expenses in 2017-2019 in PV terms = ~2829

    Average expenses in 2017-2019 in PV terms = ~943
    --------------------------------------------------
    My question: Is the average line (~943) correct?

    If any of you are familiar with the PMT function in Excel,
    should I use it here instead? if yes, how?
    All I can say is the 3 PV calculations are correct.

    The rest of your questions make no sense.
    You need to learn about financial formulas.
    And about Excel functions.
    Last edited by DenisB; Mar 20th 2017 at 05:50 AM.
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  5. #5
    MHF Contributor
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    Re: Calculating annual average growth

    The reason that you are not getting better answers is that no one understands what you are trying to do. What is the significance of present value in this context? If your expenses are 1000 each year surely 1000 is the most relevant average?
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