I need a formula?

Question

I need to calculate annual growth. So if i grow my wealth by 1.5% each year. I need to know the formula for how to project 2040 without actually doing each year.

Answer 1

A = P(1.015)^t

 

Where:

A is your wealth at time t

P is your principle, or starting value

t is years since 2016 (or whatever year you started)

 

So if you started in 2016 with $100,000, by 2040 your $100,000 would grow (at 1.5% per year) to:

 

A = ($100,000)(1.015)^2040-2016

A = ($100,000)(1.015)²⁴

A = $142,950.28

Answer 2

Carla, if you add 1.5%, then you have 101.5%, right? The next year, you'll have 101.5% of the 101.5%, etc.

 

Current wealth x 1.015 x 1.015 x 1.015, etc.

 

Or, current wealth x 1.015²⁴