Financial
Calculate monthly savings needed to reach a financial goal (PMT)
Pass GoalAmount as the 4th fv argument of PMT (with existing savings as negative pv) to solve required monthly contributions.
Use PMT's 4th fv argument for sinking-fund targets
Most users know PMT(rate, nper, pv) for paying down a loan to $0. Passing 0 (or -CurrentSaved) as pv and +GoalAmt as the 4th fv argument solves the exact monthly deposit needed to grow to GoalAmt.
Because deposits and initial savings are cash outflows from your wallet while the final goal balance is a positive inflow, pass existing savings as -D2 and negate -PMT(...) to display a positive monthly deposit.
| GoalAmt (A) | AnnualRate (B) | Months (C) | StartSaved (D) | Monthly Deposit |
|---|---|---|---|---|
| 50000 | 0.06 | 60 | 0 | 716.64 |
| 50000 | 0.06 | 60 | 5000 | 619.98 |
| 50000 | 0 | 60 | 0 | 833.33 |
Required monthly contribution formula
At a 6% nominal annual rate compounded monthly over 60 months, compound interest lowers the required monthly contribution from $833.33 (at 0%) down to $716.64.
=ROUND(-PMT(B2 / 12, C2, -D2, A2), 2)Verify ending balance with FV
Passing the unrounded PMT directly into FV(B2/12, C2, PMT(...), -D2) confirms the exact $50,000 target.
=ROUND(FV(B2 / 12, C2, PMT(B2 / 12, C2, -D2, A2), -D2), 2)Inputs and interpretation
Assume a constant rate compounded monthly, deposits at month end, a positive integer number of months, and no fees or taxes. This is a mathematical scenario, not a promised investment return. A negative required deposit means the initial balance already exceeds the modelled need; it represents withdrawals. Rounding monthly contributions to cents can miss the target slightly; the FV check uses the unrounded contribution.
Try the example
Use the original values or change them to test your understanding.