Overview

Determining what you need to save to be able to pay future costs may seem daunting when deposits occur with a different frequency than future outflows, particularly when there are multiple series of outflows that overlap.

With InterestThing it is just a matter of correctly setting up the cashfow.

Example

On January 1st, 2024, you have $10,000 in a savings account that you have set up for your children's education.

Your rate of return is 4 %.

A year of education today costs $10,000, and inflation is 2 %. Since your son Bart will go to college in ten years time, this represents an annual cost of $12,189.94, which will increase by 2 % each year to compensate for inflation.

Two years later, for your daughter Lisa the first year cost will have risen to $12,682.42.

How much do you need to save each month to be able to cover the expected annual costs of your children's education when Bart starts to go to college?

Set up the following cashflow or select the Saving for education example in the Help > Examples menu.

Date	Type	Amount	Occurs	#	Change	Step	Comment
1-1-2024	inflow	10,000	once				Initial balance
1-1-2024	unknown	1	monthly	120			Monthly deposit
1-1-2034	outflow	12,189.94	annually	5	2 %	1	Education Bart
1-1-2036	outflow	12,682.42	annually	5	2 %	1	Education Lisa

Enter 4 into the rate field and select annual compounding in Compute Options.
Make sure that Auto update is checked.

You'll find the answer in the x Value field: 681.25, which means that you'll need to deposit $681.25 each month until Bart goes to college.

If you expect to be able to continue saving after 1-1-2034, you can adjust the number of monthly payments accordingly.

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