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workingBen / piggybank

PiggyBank. Oink oink and shit.
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Financial arbitrage workflow #4

Open mcgrathpm opened 11 years ago

mcgrathpm commented 11 years ago

We will likely go through several iterations of this before we can all agree on it as something presentable to investors.

jkaracozoff commented 11 years ago

Agreed, I am putting together the financial breakdown in a google spread sheet and am hoping to make into a powerpoint to present to you guys. The concepts are not difficult, but the calculations and tracking of the investments vs distribution will have to be broken down very carefully. Scalability is also something that will need to account for depending on projected future contributions.

jkaracozoff commented 11 years ago

http://www.globalresp.com/plan2.htm

jkaracozoff commented 11 years ago

Ben Please take a look at this formula for calculating the effective rate on an account when the account compounds monthly. I really think the idea of rolling "pending monthly charges" into an account at the first of every month will really help keep things easy to understand. here is a good explanation of calculating the effective rate which we typically use for investments like this.

http://www.wikihow.com/Calculate-Effective-Interest-Rate

jkaracozoff commented 11 years ago

Here the Formula I used to create the FV of an uneven set of contributions going out 18 years, set at a 3-2-1 rate breakdown. With the calculator we should be able to have them estimate how much they can afford per month ($100.00) and what the child's age is. This is tell them how much there account would equal over that period using the formula below. Then what if we include another slider bar that estimates friends and family contributions and recalcs the growth with the formula below based on projected "outside" contributions. Then we can show a very impressive account growth based on 'social investments'.

Future Value where: PV=Present Value of Annual Account Balance r=(.03)/(.02)/(.01) n=# of payments *(I set this at 1 in order to create an even rate over the entire segment)

FV=PV1(1+(.03)^1+PV2(1+(.03)^1+PV3(1+(.03)^1+PV4(1+(.03)^1+PV5(1+(.03)^1+PV6(1+(.03)^1 +PV7(1+(.02)^1+PV8(1+(.02)^1+PV9(1+(.02)^1+PV10(1+(.02)^1+PV11(1+(.02)^1+PV12(1+(.02)^1 ++PV7(1+(.01)^1+PV8(1+(.01)^1+PV9(1+(.01)^1+PV10(1+(.01)^1+PV11(1+(.01)^1+PV12(1+(.01)^1

jkaracozoff commented 11 years ago

Sorry here is the correct formula with PV for 18 years.

FV=PV1(1+(.03)^1+PV2(1+(.03)^1+PV3(1+(.03)^1+PV4(1+(.03)^1+PV5(1+(.03)^1+PV6(1+(.03)^1 +PV7(1+(.02)^1+PV8(1+(.02)^1+PV9(1+(.02)^1+PV10(1+(.02)^1+PV11(1+(.02)^1+PV12(1+(.02)^1 +PV13(1+(.01)^1+PV14(1+(.01)^1+PV15(1+(.01)^1+PV16(1+(.01)^1+PV17(1+(.01)^1+PV18(1+(.01)^1