Exponential growth PartII

L

Lestrygonians

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Ok so I have been advised to post this part 2 in a separate thread so here goes.
You helped me in my last thread to properly use the formula a(1+r)12 to calculate the growth of an investment gaining monthly growth over a year.
Now, with that in mind, how would I change that formula if I wanted to take a small fixed monthly income from that. I can see that it is not simply a deduction from the a value; nor is it simply a matter of deducting the total withdrawal from the final amount (i don't think); so is it a totally different calculation like an f(x) function? Or maybe it is an adjustment to the number 1 in the (1+r) part?Would appreciate if anyone could help

Les
 
Beer soaked ramblings follow.
Lestrygonians said:
That's a great help guys. Is this your way of saying you don't know the answer?
Click to expand...
No it's not.
That is the answer.
Annuities.
It would take a war and peace kind of a post to answer your question so you might as well Google it first so you can gain an idea on how to narrow down your situation to a specific type of annuity.
Start here: https://en.m.wikipedia.org/wiki/Annuity
 
Ok then I tried all that google and wiki stuff and it is way over my head and APR does not apply to this because an apr assumes an annual rate of interest paid in increments. So I will respond to your facetiousness by re-asking the question. Take note that my degree is in English not maths. So you can all understand my question, here is MY War and Peace
I have a small investment growing at 50% per month. This is not an apr it is per month. I was told that my investment would grow 100 fold in 12 months. You already helped me in confirming that by making sure I was using the exponential growth formula a(1+r)12 correctly and it confirms that my investment will grow at least 100 fold in the 12 months.

Now, after year 1 let's say my investment is worth €2000 (it started with €20). That will grow at the same 50% monthly; but I may take an income of say €500 a month out. This will obviously affect the growth. All I wanted to know was is there a simple adjustment to the formula to allow for these deductions. If it is too complicated, don't worry about it. I can work it out in columns and rows on paper or in a spreadsheet. I just hoped there might be an easier way of working it out. If there isn't - all you have to do is say so and I will go away.

Les
 
Lestrygonians said:
Ok then I tried all that google and wiki stuff and it is way over my head and APR does not apply to this because an apr assumes an annual rate of interest paid in increments. So I will respond to your facetiousness by re-asking the question. Take note that my degree is in English not maths. So you can all understand my question, here is MY War and Peace
I have a small investment growing at 50% per month. This is not an apr it is per month. I was told that my investment would grow 100 fold in 12 months. You already helped me in confirming that by making sure I was using the exponential growth formula a(1+r)12 correctly and it confirms that my investment will grow at least 100 fold in the 12 months.

Now, after year 1 let's say my investment is worth €2000 (it started with €20). That will grow at the same 50% monthly; but I may take an income of say €500 a month out. This will obviously affect the growth. All I wanted to know was is there a simple adjustment to the formula to allow for these deductions. If it is too complicated, don't worry about it. I can work it out in columns and rows on paper or in a spreadsheet. I just hoped there might be an easier way of working it out. If there isn't - all you have to do is say so and I will go away.

Les
Click to expand...
You will need to talk to a financial advisor (or an officer of the financial institution} to get precise answer.

The answer will depend on;

How do your financial institution calculate interest rate - APR, APY, daily, or some other method?​
​
When do your financial institution calculate interest rate and add to the principal?​
​
When (date) do you withdraw your money relative to the date above?​
​

The answer is not complicated - but requires critical reading of contract (that degree in English might come-in handy here).
 
ok thanks for your help guys. I guess its a more complicated answer that can't be calculated with a simple formula. The investment has no contract it is simply a crowd funding thing. He said he could give me 50% per month on my money at the end of every month and for 3 months he has done it. It is high risk/high return. I guess if i want a formula or more definitive answer I have to go to an actuary and not a free maths forum
Les
 
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