Saving for College

[Struggling College Student]

I have to make a plan for a monthly payment deposit for the next 15 years.
The account pays 4.5% annual interest, compounded monthly. I have to use the
FV function to determine the % of college tuition saved.

Out of State Annual Tuition=40000
Rate(per month)=4.5%/12
Nper(number of monthly payments)=15*12
Pmt(payment per period)=375
Percentage of Tuition Saved=FV/Tuition for 4 years

 

[JoeU2004]

I think you want (in A1):

=fv(4.5%/12, 15*12, -375)

which translates into depositing 375 per month into a savings account that
earns annual interest of 4.5% compounded monthly.

As for percent of tuition saved:

=A1 / (40000 * 4)

formatted as Percentage.

PS: When using Excel financial functions like FV, PV and PMT, inflows and
outflows should have different signs (positive and negative). Which to use
for inflow or outflow is arbitrary; it depends on your point of view (saver
v. bank; borrower v. lender). I tend to choose the point of view that
results in a positive function result.

PPS: For future reference, it is better to keep all related posting in the
same (original) thread. I decided to duplicate my response to your other
posting (title "FV") because the title and your posting here are clearer to
me. This might be the better thread to continue with.


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