I have an excel spreadsheet that is using a “FV(rate,nper,pmt,pv,type)” calculation to determine a “Termination Charge” for breaking a contract.
I have the Initial Contract Length which determines a RatePerMonth. When the customer terminiates before the OriginalContractLenght, we must upcharge them to a higher RatePerMonth for a LowerContractLenght.
i.e.
Customer signs 36 month contract @ $15.00 per month.
The Customer then terminates 22 months in. Therefore, we need to “up-charge” the customer to the next lowest contract length of 12 Months which would relate to $18.00 per month. A difference of $3.00 per month for hte previous 22 months plus the set intrest and “Future Value”.
(The answer for this would be $73.66 by the way if you were to test this example)
So…
I have the Intrest Rate set at 0.99384 being the “rate” part fo the equation.
The MonthsUsed = 22 is equal to the “nper” part of the equation.
And finally the “pmt” is the Difference in RatePerMonth part fothe equation.
FV(rate, nper, pmt)
Any thoughts ladies and gentle man. I thank anyone for their help in advance and I am kind of new to LS so please be kind.
Thanks