RatedrillMonthly saving to reach a goal
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
You want $15,000 in 30 years. Your account earns 3.25% APR, compounded monthly. How much must you deposit at the end of each month?
What this problem teaches
The formula: PMT = FV × i / ((1 + i)^n - 1). Set P/Y = C/Y = 1, so I/Y is the rate per period. Cash you pay out is negative and cash you receive is positive.
A hint if you get stuck
Rearrange the annuity future value formula: PMT = FV × i / ((1 + i)^n - 1).
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