Hi
I need to find a formula (not using Goal Seek) to find what regular monthly payments need to be made to achieve a target amount where the payments increase every year by a fixed amount. The known information is as follows:
Target: £1,000,000
Term: 12 years 7 months
Payment frequency: Monthly (but could also be annual)
Payments to Increase: Annually (assume on anniversary of 1st payment)
Payments increase by: 3% p.a
Annual Gowth rate: 4% p.a. compound
I obviously need to know the starting payment but it would also be helpful to know the amount of the final payment. This is to calculate how much someone needs to start saving into a pension now to achieve their retirment goal where payments are linked to salary which it is assumed will increase at 3% p.a. The whole fund will grow at say 4% p.a.
I have searched high and low to find an answer but todate no success. Any help would be very much appreciated
Regards
flossy129
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