The formula to calculate the future dividend income is:
\[ D = \text{CDI} \times (1 + r)^n \]
Where:
Dividend growth is the total growth of a dividend over a time period. It is calculated by multiplying the current dividend income by 1 plus the growth rate raised to the power of the time in years. This calculation helps investors understand how their dividend income will increase over time based on the expected growth rate.
Let's assume the following values:
Using the formula:
\[ D = 1000 \times (1 + 0.05)^{10} = 1000 \times 1.6289 = 1628.89 \]
The Future Dividend Income is 1628.89.
Let's assume the following values:
Using the formula:
\[ D = 500 \times (1 + 0.03)^{5} = 500 \times 1.1593 = 579.65 \]
The Future Dividend Income is 579.65.
