The factor of 66.4388 means that the same $12,000 a year contributed to, for example, a retirement savings account earning 5% would grow in 30 years to $797,265.60. įor example, the factor for 30 years at 5% is 15.3725, so payments of $12,000 a year would pay off a loan of 12000×15.3725 = $184,470 at that rate over that period. On the other hand, " given " is the present value of an amount that can be paid off by making payments of amount. Notice that " given " shows the value of the accumulated sum of an amount, saved in each of periods and compounding at interest rate. The inverses of those quantities are " given " and " given ". " given " shows the amount that must be paid to amortize an amount borrowed over the same period, with interest paid rather than earned on the outstanding balance-for example, a conventional mortgage.
" given " gives the portion of the desired future accumulated amount that must be contributed at each time period to reach the desired goal. Or you can use the inverse, a discount factor, expressing the portion of a desired final value that must be invested to grow to in periods when invested at percent.Ī uniform payment means that instead of a one-time investment, equal amounts are paid into a fund that compounds at interest rate for each of the periods.
A single payment is a one-time investment of compounded at interest rate for periods that will reach a value.
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