View Full Version : For the mathmatically inclined

10th Jun 2014, 12:22
Been advised that I am to receive a payment of GBP 2,300.00, which is the residue of a pension fund I left twenty five years ago and understood to be empty!

Assuming an average interest rate of 5.5% (fair?) over the past twenty five years how much was the original capital sum?

I haven't a clue how to work this one out! :O

10th Jun 2014, 12:23
Does it involve ringing a chap in Nigeria?

10th Jun 2014, 12:32
600. . . .

10th Jun 2014, 12:35
Your final sum is the original sum times (1.055)^25, so the original sum must've been the final sum divided by (1.055)^25, assuming 5.5%. I get just over 600 quid.

10th Jun 2014, 12:50
Yeah, there are a number of good TVM calculators on the net.

After an excellent landing etc...

10th Jun 2014, 12:54
The only thing to add is that the Retail Prices Index has increased by an average of 3.09% (UK) or 3.0% (Oz) over the last 25 years. If you use this as the increase rate, the original amount comes out at about 1,074 (UK) or 1,106 (Oz) - figures from Stats Agency & Reserve Bank of KangarooLand

Effluent Man
10th Jun 2014, 12:58
I sold my house in 1987 for 50k.I know that similar houses in that area now sell for around 190k.Intersting more or less the same capital growth.

10th Jun 2014, 14:11
I make it 655.58

10th Jun 2014, 14:26
radeng, please show working. ;)

10th Jun 2014, 14:33
Radeng, I think you used 2,500, with the correct working, whereas the amount is actually 2,300

10th Jun 2014, 17:24
I used to possess a lidl blue book. Gift from Amex bank manager I think. Smaller even than 1/2 of A5 size. With tables calculating present / future / past values @whatever interest rate and adjustment to accommodate inflation etc. Haven't needed it for many decades :{, could not find it anywhere in the appartment gathering dust today either.

Noone's mean't to know how rich (or poor) they are these days. We're totally reliant (or should be) on what our governments tell us these days. We should be ever grateful for the few crumbs leftover of our monthly labours after taxation.

PS. All the banks (even the Swiss ones) are together with the governments today. They're cohorts. If you're "one of them", don't worry about your pension...?! :uhoh:

10th Jun 2014, 21:59

Sorry, you're right. Misread. Blame age and the fact that new spectacles are on order!


11th Jun 2014, 03:57
Thank you all very much, amazing that I somehow 'forgot' this amount, used to think I kept a close eye on my money!

Thanks again. :ok: