Help needed with PMT Function with an initial down payment

[Emily_Anderson]

I need help solving the following problem. I know what to do with the standard PMT Function but what does one do when one has an initial deposit or down payment. I have to solve the following problem:

A client is interested in a certain insurance product. She expects to earn $11, 0000 after 18 years at 15% annual interest rate, once the policy matures. How much is her monthly premiums/payments going to be, also consider that when signing up for the policy she paid an initial down payment/deposit of $10000?”
rate: 15%/12
nper: 18*12

fv: 11,0000

 

[Latchmaker]

11,0000 should this be 110,000?

 

[Emily_Anderson]

Yes. Sorry.

 

[Latchmaker]

=FV(15%/12,18*12,0,-10000)

Her Payment would be Zero the 10000 will grow at the given rate of 15% for 18 years to $146,327.81

 

[Latchmaker]

If the Deposit is actually 1000 then change the -10000 to -1000

 

[Latchmaker]

You can change the Zero to a payment to calculate future value

For Example if Down Payment was 1000 then change the Zero to 114.28 and that would give you $110,003.56

 

[Emily_Anderson]

Thank you so much.

 

[joeu2004]

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