How to Calculate Payments for a Future Amount
- 1). Determine the interest rate the bank is willing to give you on an account, the number of payments you will make and the amount you want to save. For example, assume you can receive 3% interest a month on a bank account. You can deposit into the account one time a month for 40 months. You want $20,000.
- 2). Match the interest rate and number of payments you can make on the future value of an annuity table, located in the resources. In the example, the matching number for 3% at 40 periods is 75.4013.
- 3). Divide the amount future value of an annuity factor from Step 2 by the amount of money you want to save. In the example, 75.4013 divided by $20,000 equals $265.25 you need to deposit 40 times to reach your goal.
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