Maturity Value of Recurring deposits: TVM Calculation Examples

Q. Find the maturity value of Rs. 10000 deposited every month for 10 years with a nominal interest rate of 8.75% compounded quarterly.

Open the Future Value of Annuity screen. Select solve for Future value.

Payment Amount: 10000

Payment Frequency: Monthly
Number of payments: 120 (10 * 12)
Annual Interest Rate: 8.75
Compounding Interval: Quarterly
Payment mode: Beginning

Ans: 19,15, 030.85

Likewise, you can use the calculator for to find the maturity value and interest earned for daily deposits/ quarterly deposits/ semi-annually and yearly deposits by changing the payment frequency.

If you don't want to install the app, you can use this online rd calculator.

Retirement Saving - TVM Calculation Examples

Q. You plan to retire 33 years from now. You expect that you will live 27 years after retiring. You want to have enough money upon reaching retirement age to withdraw $180,000 from the account at the beginning of each year you expect to live, and yet still have $2,500,000 left in the account at the time of your expected death (60 years from now). You plan to accumulate the retirement fund by making equal annual deposits at the end of each year for the next 33 years. You expect that you will be able to earn 12% per year on your deposits. However, you only expect to earn 6% per year on your investment after you retire since you will choose to place the money in less risky investments. What equal annual deposits must you make each year to reach your retirement goal?

I. Calculate PV of amount needed at the time of retirement

Open the Present Value of Annuity screen. Select solve for Present Value.

Annual Interest Rate: 6

Payment Amount: 180000
Payment Frequency: Yearly
Number of payments: 27
Compounding Interval: Yearly
End Balance: 2500000

Payment Mode: Beginning

Ans: PV = 3038989.79

II. Calculate Payment to achieve your retirement goal

Open the Future Value of Annuity screen. Select solve for Payment.

Future Value = 3038989.79
Annual Interest Rate: 12

Payment Frequency: Yearly
Number of payments: 33
Compounding Interval: Yearly

Payment Mode: End

Ans: 8874.79

Financial Goal Planner - TVM Calculation Examples

Q. How much would I have to deposit in an account today that pays 12% interest, compounded quarterly, so that I have a balance of $100,000 in the account at the end of 10 years?

Open the Single Cash Flow screen. Select solve for Present value.

Future Value: 100000

Annual Interest Rate: 12

Time Period in Years: 10

Compounding Interval: Quarterly

Ans: $30,655.68

Q. How much to save every month so that I have a balance of $100,000 in the account at the end of 10 years, if the return on investment is 12% compounded annually?

Open the Future value of Annuity screen. Select solve for Payment Amount.

Future Value: 100000
Payment Frequency: Monthly

Annual Interest Rate: 12

Number of payments: 120 (10 * 12)

Compounding Interval: Yearly
Payment mode: End of Period

Ans: $450.59


If you don't have the app installed, you can use this online sip calculator for planning your periodic savings/ investments.