Future Value Help - Preparing for university work

crazyjoyce

Hi guys, i'm due to start a degree in building surveying in september and the university have given us some work to look at.

Haven't been able to find much on the web so far, so thought id ask in here.

The problem i have is, what is the future value of £100pa for 2 years, followed by £130pa for 4 years at 6%pa.

Is it as simple as working the two values out individually and putting them together?

Thanks in advance!

Rafter

joyce,

Looks like a compound interest calculation - should be able to do this fairly easily in excel.

Use 6 rows - labelled Year 1 to 6

In year one you are going to invest £106 and earn 6% interest so you will have £106 at the end of the year.

In the second year you will have £106 brought forward, add £100 and will earn 6% interest on £206 giving you £218.36 at the end of the year.

Repeat for the next four years adding £130.

When you have equal investment amounts you can use functions like =FV but in this case, and to help your understanding, better to work it out year by year.

Good luck with your studies.

R.