FormuladrillMonthly deposit for a goal
An Excel formula exercise from Formuladrill. Solve it with a formula bar on a live sheet in your browser, and it is checked the moment you submit.
The task
How much must be deposited at the end of every month to reach the target in B1 after the years in B3, if the money earns the annual return in B2 compounded monthly? The answer must be positive. Put it in B4.
What this exercise teaches
PMT solves for the regular payment in any time-value problem; the fourth argument is the future value, which most people forget exists. Monthly compounding means the rate and the periods are both monthly.
A hint if you get stuck
PMT(rate, periods, present value, future value). The present value is 0; give the target as a negative future value to get a positive deposit.
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