Excel - Escalator or Appreciation Formula

[lrd176]

I am looking for an Excel formula similar to one that would combine th
PMT and DB formulas but with an escalating payment. The formul
variables should be: beginning monthly payment, yearly paymen
escalator, and period (# of years) and should provide me with futur
value at the end of the full period. To be more specific- If I a
paying rent and the rent I pay increases x% each year, how much have
paid total after z years?

Thank

 

[Bernard Liengme]

Sounds like homework.
Let monthly payments in first year be P
In one year I pay P*12
Next year I pay (P*12)*(1+X)
Following year (P*12)*(1+X)^2
And so on
This is just an annual compound interest problem

Best wishes

 

[lrd176]

Actually, it's not quite a compounding interest problem because I am no
applying the escalating interest to the entire sum, just each year'
payment. I did figure out how to calculate the payment P after n year
at a rate increase r with initial cost of c. That is P=cr^(n-1). Bu
now how do I add all of the years up? c + cr + cr^2 + cr^3 + cr^4 ...
What is that formula?
Thank

 

[Fred Smith]

The future value of n PMTs which increase at rate j invested at rate i is:

FV = PMT * (((1+i)^n - (1+j)^n)) / (i-j))

If i = j (which I believe is your case):

FV = n * PMT * (1+i)^(n-1)