This is an example of the use of the Function: AFVFutureValueIncreasingCashFlows.
In this example, we calculate the future value of monthly insurance payments comparedto a fixed death benefit.
All function arguments are handled as local variables in the script.
The example defines some of the local variables as the Elements connected to the Variable element "Future Value of Monthly Payments":
number_of_deposits = Number of Payments
deposit_amount = Monthly Payment
annual_interest_rate = Annual Interest Rate
rate_of_deposit_increase = Inflation Rate
Other arguments are keywords picked from the list box which is available when
editing a Variable element:
deposit_period = MONTHLY
deposit_timing = ADUE
short_period_option = SIMPLE
compounding_period = ANNUAL
The Syntax used is:
AFVFutureValueIncreasingCashFlows(
number_of_deposits ,
deposit_period ,
annual_interest_rate ,
deposit_amount ,
deposit_timing ,
short_period_option ,
compounding_period ,
rate_of_deposit_increase )
The model calculates the future value of monthly life insurance payments which are indexed to increase at the estimated inflation rate based on an annual interest rate which could be earned if the money were invested instead of paid into a life insurance contract. The future value for each month can be viewed using the scrolling arrows next to the Simulation Step box.
To recalculate the model and provide new inputs, simply click the Recalculate tool on the vertical toolbar (the checkered flag) and the DS Lab will prompt you for new input values.
If you wish, you may change the number of time periods for which the model is simulated. To do so, click on the Simulation Parameters tool (the open book) in the vertical toolbar and change the entry in the No. of Steps box then choose the OK button .