When it comes to saving or spending, a number of concepts include a cash flow each year, or period in question.Â  An annuity formula best summarizes how to address these matters in Excel.Â  (Related:Â What Is An Annuity?Â - Video )

Here is both a present and future value formula for an annuity:

PV = C((1 - 1 / (1 + r)t / r)

In the below example, an individual is able to save \$10,000 per year for 10 years in the stock market and earn an estimate 10% per year.Â  The present value of that savings program is \$61,445.

The future value of that savings program is \$159,374.Â  At the end of that 10 year program, the savings will have grown to nearly \$160,000.

Guide To Excel For Finance: Valuation Methods
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