Growing your money

Financial Modeling in Google Sheets

Erin Buchanan

Professor

What is an annuity?

  • A series of payments
  • Insurance payments, pension payments, investments
Financial Modeling in Google Sheets

Save for college

  • College costs average 10,000 per year for in-state tuition
  • You might consider inflation as well to make sure you save enough
  • Use the payment or pmt() function to determine payments into an annuity to save
Financial Modeling in Google Sheets

Use the pmt() function

The pmt() function:

=pmt(rate, number_of_periods, -present_value, future_value)

  • rate: interest rate
  • number_of_periods: number of payments
  • present_value: present value
  • future_value: future value

PMT function

PMT filled in

Financial Modeling in Google Sheets

Use the nper() function

The nper() function:

=nper(rate, payment_amount, -present_value, future_value)

  • rate: the interest rate
  • payment_amount: amount paid or taken out
  • present_value: present value (starting balance)
  • future_value: future value (ending balance)

NPER Function

NPER Filled in

Financial Modeling in Google Sheets

Try it on your own!

Financial Modeling in Google Sheets

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