Thread: Superannuations Questions

A person invests $1500 annually to accumulate at 12%p.a. What will the credit balance of this investment be after making the 16th payment?


1500(1.12+1.12^2…1.12^16)
Credit Balance: [1.12(1.12^16 – 1)]/(1.12 – 1)

But I get $71826, while the answer is $64130


Also,
In the first year of joining a superannuation fund a woman invests $400. The interest rate is 12% p.a. Each year the woman invests an additional 10% of the amount invested in the previous year to allow for inflation. How much does she invest in the second year? How much does she receive after 20 years?


Thank you for any help given

Hi,(Q1) Possibly because, after the 16th Payment takes place at the start of the 16 year, and the Capital plus interest is not Compouned for that last year.
i.e Balance at the end of 15 years = 62629
add the last payment @ start of 16th year :- 1500 + 62629.92 = 64129.92.
Regards Mick

Hi, I imagine the 2nd Term is 400*1.1. The result for 20 years is shown below.

Code:

Formula=(A2*((D2*(B2^C2))-(B2*(D2^C2))))/(D2*(B2-D2))

Code:

Row No  Column(A)  Column(B)         Column(C)  Column(D)  
1.      Invest     Rate +1           Term +1    Inf Rate+1 
2.      400        1.12              21         1.1        
3.      Result =   65380.9664244651

Regards Mick