Interest calculators

rsbright

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.

grumbler

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 121-122 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)

rsbright

Many thanks for the info, I didn't think anyone would get back to me on that one! V. grateful

cheerfulcat

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

richgirl

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.php