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Annuities Help please!

  1. May 12, 2013 #1
    Hi guys I am trying to come up with an equation to solve for a break even point. Basically I have an initial outlay of cash with then a trail of income in the subsequent months. I need to know how often per year I need to receive this trail of income in order for the future discounted cash flows to equal the future value of my initial outlay of cash. I hope that makes some sought of sense.

    The way I was thinking was using an annuities formula as follows:

    156,433.8 is my future value of the cash spent up front.

    8,350 is my recurring income that remains constant throughout.

    I've used 8% as my discount factor and it's over a period of 5 years (compounding monthly)

    156,433.8 = 8,350 (((1 + (0.08/12) x)^(60/x) - 1)/((0.08/12) x))

    Firstly I'm not 100% whether my formula is correct and second of all I'm stumped on how to solve it.

    I'm trying to build this function into excel if anyone knows any tricks there.

    Thanks for your time!
  2. jcsd
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