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Interest calculators
rsbright
Posts: 23 Forumite
Does anyone know of a calculator or system that will help to work out the following:
If you invest an amount  say £100,000 and receive 4% net interest, then each year you draw out enough to make an income of £12,000 per year, how long would the money last!
Thanks for any advice.
If you invest an amount  say £100,000 and receive 4% net interest, then each year you draw out enough to make an income of £12,000 per year, how long would the money last!
Thanks for any advice.
0
Comments

This problem is in fact an inverse problem of a loan repayment. There are many online calculators, but all work with monthly payments (withdrawals in your case: £12000/12=£1000).
See, for example, http://www.whatsthecost.com/loan.aspx
Enter (£) 100000, 4 (%) and then try different numbers of months until you get a monthly figure close to 1000.
It is between 122 months (998.95) and 121 months (1005.64).
You can also use Excel:
=NPER(4%,12000,100000,0)
The result 10.34 (years) is slightly different from the above 121122 months because this formula is for yearly withdrawals as you wanted.
For monthly withdrawals:
=NPER(4%/12,1000,100000,0) The result is 121.84 (months)
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Many thanks for the info, I didn't think anyone would get back to me on that one! V. grateful0

There's a calculator of the sort you require ( or something like it, anyway ) here.0

rsbright wrote:Does anyone know of a calculator or system that will help to work out the following:
If you invest an amount  say £100,000 and receive 4% net interest, then each year you draw out enough to make an income of £12,000 per year, how long would the money last!
Thanks for any advice.
Theres a good one at http://www.moneyforums.co.uk/savings_calculator.php0
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