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You want to have $75,000 in your savings account 12 years from now, and you’re prepared...

You want to have $75,000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit each year? How to input the formula in Excel?

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Answer #1

Desired sum after 12 years = $75,000
Annual Interest rate = 6.8%

Annual Deposit * FVIFA(6.8%, 12) = $75,000
Annual Deposit * (1.068^12 - 1) / 0.068 = $75,000
Annual Deposit * 17.67928 = $75,000
Annual Deposit = $4,242.25

Using Excel:


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