Calculating Required Investment Deposits
A slightly different problem is when a person has a financial goal in mind and needs to know what it will take to get there. For example, if a couple thinks they'll need $60,000 for their child's education in 18 years, what do they have to put aside every year (assuming 8% annual interest)? Here's the general formula:
PMT = FV x IR / ((1 + IR)NP 1)
PMT = FV * IR / (Math.pow(1 + IR, NP) - 1)
Listing 4 shows you how to calculate the specific example given above.
Listing 4: Calculating Required Investment Deposits