I was just trying out some “math” and trying to arrive at some figures. However, i got confused and not sure if was doing it right! Can you please help me out?
1. Finding a Future Value of Current Expense.
Future Value =FV(8%,25,,-200000). I get a value of 13,69,695.04. So a Expense of 2L will be 13.6L after 25 years. Is this correct?
So Corpus Required = FV(185/100, 10, 13,69,695.04,,1). I got a value of 1,51,72,459.78. Around 1.5Crore. So i would need a corpus 1.5Crore then it would last me 10 years while withdrawing 13.6Lakhs per year. Is this right?
3. How much do i need to SIP to generate a corpus of 1.5Crore.
Using Excel, =PMT(12%/12, 25*12, ,-1,51,72,459.78). I got a value of 8,075.41. This is the amount i need to SIP every month. Is this correct?
=FV(12%, 25, 8075.41*12). This is to check if can generate a Corpus of 1.5Cr assuming i SIP 8K per month of the next 25 years with a Rate of return = 12%. I got a value 1,29,20,710.52. Which is like 30Lakhs short of 1.5Cr!!
What am i doing wrong here? Any help please! Am i even doing it right or is the whole thing a waste of time?