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Which financial function will give me the highlighted value in the attached spreadsheet

Hello,

I'm not certain how to phrase my question so I'm attaching an example instead. If a current expense increases by 3% per year over the next 20 years how much total expense will be incurred in total?

In the attached Excel file I've mocked up the example. I used the FV() function to determine the expense for year 20, but I want to calculate the sum of the total 20 year's expense (1433.82 in cell A23) using a function in a single cell.  Any ideas?

Thanks!
David

 Expense-Increase.xlsx
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dking_wri
Asked:
dking_wri
1 Solution
 
jppintoCommented:
Please take a look at my article about financial functions in Excel:

http://excel-user.blogspot.com/2011/02/excel-financial-functions.html

jppinto
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dking_wriAuthor Commented:
Hi Jppinto,

Thanks for your link, but I'm not finding exactly what I need. I used the FV() function in my spreadsheet to calcuate what the expense would be with a 3% annual increase after 20 years. But I'm looking for the sum of the expense amount over the 20 year period. Do you know which function will provide that?

Thanks,
David
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byundtCommented:
If $1433.82 is the answer, try using the FV function:
=FV(0.03,21,-A2)

Brad
0
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Rob HensonFinance AnalystCommented:
Simple mathematical function would be, where base value is in A2:

=A2*1.03^20

1.03 is the same as 103% ie 1 plus 3%
The ^ is the same as "to the power of".

So formula equates to Base x 1.03 x 1.03 x 1.03 etc, repeated 20 times.

Regards
Rob H

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Rob HensonFinance AnalystCommented:
Apologies, just tried that and I get the $90.31, the value in year 20, not the total.
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dking_wriAuthor Commented:
Brad,

Thanks for the tip on using the FV function. It worked perfectly!  

David
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