Compound interest with monthly contributions

[mactoolsix]

I have done something wrong, but don't see it:
One year of 59.49 monthly investments

Rate = 8.2% annual (cell AZ15)
nper = 12 months
pmt = 59.49 each month (cell BD38)
pv = 0

Answer should be 1,142.43

Using the formula: =FV(AZ15/12,1*12,-BD38,,0) returns 741.33

What did I do wrong??

I also tried this formula that I got from an Excel website:
=FV((1+AZ15/12)^1/12,12,-BD38,,0) which returns 1,155.42
Seems logical, Close but not correct. not sure why?

Thanks!
Mike

 

[joeu2004]

But (1+8.2%/12)^1/12 [sic] is completely wrong.

It should be (1+8.2%)^(1/12)-1, if 8.2% is a compounded rate (usually not).

Also, I would presume that payments are at the beginning of periods. So it should be =FV(8.2%/12,12,-59.49,0,1).

I will play with 1142.43 to see what parameters you might have misstated. But your original calculation is essentially correct for the parameters stated.

But what makes you think that is the intended answer?

 

[joeu2004]

I suspect that you have a some typos: 18 months, not 12; 59.59 per month, not 59.49; and FV is 1142.34, not 1142.43 (dyslexic). Also, 8.2% is a (compounded) yield, not a (simple) interest rate. Then:

=FV((1+8.2%)^(1/12)-1, 18, -59.59, 0, 1)

is 1142.34.

 

[mactoolsix]

I suspect that you have a some typos: 18 months, not 12; 59.59 per month, not 59.49; and FV is 1142.34, not 1142.43 (dyslexic). Also, 8.2% is a (compounded) yield, not a (simple) interest rate. Then:

=FV((1+8.2%)^(1/12)-1, 18, -59.59, 0, 1)

is 1142.34.

Joe, thanks for the look . .
Nope no typos
12 months (investing $59.49 each month)
And per a worksheet the ending balance should be 1142.43
Compound interest

<tbody>
[TD="width: 71"][/TD]
[TD="class: xl64, width: 93"]PMT
[/TD]
[TD="class: xl64, width: 86"]Inter[/TD]
[TD="class: xl64, width: 86"]Total[/TD]

[TD="align: right"]1[/TD]
[TD="class: xl65, align: right"]59.49[/TD]
[TD="class: xl65, align: right"]4.88[/TD]
[TD="class: xl65, align: right"]64.37
[/TD]

[TD="align: right"]2[/TD]
[TD="class: xl65, align: right"]123.86[/TD]
[TD="class: xl65, align: right"]10.16[/TD]
[TD="class: xl65, align: right"]134.01[/TD]

[TD="align: right"]3[/TD]
[TD="class: xl65, align: right"]193.50[/TD]
[TD="class: xl65, align: right"]15.87[/TD]
[TD="class: xl65, align: right"]209.37[/TD]

[TD="align: right"]4[/TD]
[TD="class: xl65, align: right"]268.86[/TD]
[TD="class: xl65, align: right"]22.05[/TD]
[TD="class: xl65, align: right"]290.91[/TD]

[TD="align: right"]5[/TD]
[TD="class: xl65, align: right"]350.40[/TD]
[TD="class: xl65, align: right"]28.73[/TD]
[TD="class: xl65, align: right"]379.13
[/TD]

[TD="align: right"]6[/TD]
[TD="class: xl65, align: right"]438.62[/TD]
[TD="class: xl65, align: right"]35.97[/TD]
[TD="class: xl65, align: right"]474.59[/TD]

[TD="align: right"]7[/TD]
[TD="class: xl65, align: right"]534.08[/TD]
[TD="class: xl65, align: right"]43.79[/TD]
[TD="class: xl65, align: right"]577.87[/TD]

[TD="align: right"]8[/TD]
[TD="class: xl65, align: right"]637.36[/TD]
[TD="class: xl65, align: right"]52.26[/TD]
[TD="class: xl65, align: right"]689.63[/TD]

[TD="align: right"]9[/TD]
[TD="class: xl65, align: right"]749.12[/TD]
[TD="class: xl65, align: right"]61.43[/TD]
[TD="class: xl65, align: right"]810.54[/TD]

[TD="align: right"]10[/TD]
[TD="class: xl65, align: right"]870.03[/TD]
[TD="class: xl65, align: right"]71.34[/TD]
[TD="class: xl65, align: right"]941.38[/TD]

[TD="align: right"]11[/TD]
[TD="class: xl65, align: right"]1,000.87[/TD]
[TD="class: xl65, align: right"]82.07[/TD]
[TD="class: xl65, align: right"]1,082.94[/TD]

[TD="align: right"]12[/TD]
[TD="class: xl65, align: right"]1,142.43[/TD]
[TD="class: xl65, align: right"]93.68[/TD]
[TD="class: xl65, align: right"]1,236.11[/TD]

[TD="class: xl65, align: right"][/TD]

</tbody>

AH! HA!! Just found my error - the interest formula I used was 8.2% x 59.49. s/b 8.2%/12 x 59.49

Thanks again!!

 

[joeu2004]

AH! HA!! Just found my error - the interest formula I used was 8.2% x 59.49. s/b 8.2%/12 x 59.49

Klunk! I shoulda thought of that "obvious" mistake first. Oh well, good that you solved the problem yourself.