Compound Interest and Inflation Calculator

Can someone kindly help me with the following,

I have received help here before (so thanks for that), and I have now added some bits to the Excel spreadsheet (see attached)

Basically, I want to work out if starting off with X amount of money ?850,000 (Savings at start) if you receive a certain percentage income on the money (Saving annual interest rate) and spend a certain amount each month (Monthly spending from bank) how long will it last before the money runs out.

For example, Start off with ?850,000 with a fixed interest rate of 2% per year and spend ?2,500 fixed per month, according to the spreadsheet the money would not run out until 2064 (which seems like an awfully long time).


However, what about Inflation so I added the fields Annual Inflation Rate and Monthly Inflation Rate (annual inflation rate divided by 12). So the way I try to work it out to take the monthly inflation rate then for the following month increase the amount of money I need to withdraw from the bank (over and above the fixed initial amount of ?2,500 say, due to the fact things cost more to buy).

Based on the above, if I now add a 3% fixed inflation rate (and keep the 2% interest income rate), the money now runs out in 2048

Now of course all these figures are speculative, but my Question is as follows

Does the spreadsheet make sense, in other words, does it actually work, do the number stake up?

Thank you very much in advance
CXMelga

Thank you very much for your help, much appreciated