Set the Output to "AVI JPEG" in the render settings.
Also , to set the place where it is saved , Click next to "/tmp/" , That folder image. Then select where to save. After doing all these steps you can then render and it will appear where you saved it.
One of the big changes in 2.79 is that they finally separated containers and codecs.
The encoding options from previous versions are still there, but now they have organized differently
If you select FFMpeg video, there will be a new tab for Encoding options.
There you can select the container and the codec for the output file.
Container is the file format for the file, (Mov, Avi, Ogg, MP4, to name a few) sometimes is referred as a "wrapper".
Codec (short for Compression-Decompression) Is how the image is compressed. The picture quality, file size and processing power needed to view the file are largely determined by the kind of codec used and the settings used for it.