NPER - Retirement Example

All,

I'm trying to calculate how many months I could draw on my retirement funds.
Here's the example:

Present Value of Fund: 900,000
Amount deducted each month: 6,000
Expected rate of return on investment: 10%

I tried to use NPER = (.10/12, -6000, 900000) but get an error. If I make
both signs negative, I get 111, which I know the answer should be bigger.

Thoughts?

If the expected rate of return is 10% then the first month you will make as
interest 7500 (900K*10%*1/12)

and what you deduct is only 6000

Therefore you will never exhaust you funds infact they will keep growing.

That is why you get an error as period is = infinity

however using a 4% return and using the following formula I get the CORRECT
result of 208 months

=NPER(4%/12,-6000,900000)





"mschumacker" <[email protected]> wrote in message
news:[email protected]...
> All,
>
> I'm trying to calculate how many months I could draw on my retirement
> funds.
> Here's the example:
>
> Present Value of Fund: 900,000
> Amount deducted each month: 6,000
> Expected rate of return on investment: 10%
>
> I tried to use NPER = (.10/12, -6000, 900000) but get an error. If I
> make
> both signs negative, I get 111, which I know the answer should be bigger.
>
> Thoughts?

I should have realized. Thanks for the answer. Sometimes the obvious
answers are the hardest to come by.



"N Harkawat" wrote:

> If the expected rate of return is 10% then the first month you will make as
> interest 7500 (900K*10%*1/12)
>
> and what you deduct is only 6000
>
> Therefore you will never exhaust you funds infact they will keep growing.
>
> That is why you get an error as period is = infinity
>
> however using a 4% return and using the following formula I get the CORRECT
> result of 208 months
>
> =NPER(4%/12,-6000,900000)
>
>
>
>
>
> "mschumacker" <[email protected]> wrote in message
> news:[email protected]...
> > All,
> >
> > I'm trying to calculate how many months I could draw on my retirement
> > funds.
> > Here's the example:
> >
> > Present Value of Fund: 900,000
> > Amount deducted each month: 6,000
> > Expected rate of return on investment: 10%
> >
> > I tried to use NPER = (.10/12, -6000, 900000) but get an error. If I
> > make
> > both signs negative, I get 111, which I know the answer should be bigger.
> >
> > Thoughts?
>
>
>