## Future Value of Deposits

The future value of a series of deposits is the value that that they will accumulate to by a specific day in the future. The future value depends on the deposit amounts, the number of periods, the interest rate and the frequency of interest compounding.

Future value ( FV)= $420,000 NPER = 5 Rate = 8% Annual deposits (PMT) = ? As per the PMT function of excel, i.e. =PMT (rate, nper, pv, -fv) =PMT (8%, 5, 0, -420000) =$71,591.71

The required annual deposit is equal to \$71,591.71.