SOLUTION: You want to have $40,000 to buy a new boat in six years. How much do you have to save at the end of each year to reach this goal if you earn 5% a year on your savings? This is n

Question 31439: You want to have $40,000 to buy a new boat in six years. How much do you have to save at the end of each year to reach this goal if you earn 5% a year on your savings?
This is not a question from a textbook but from an online finance course. Thank you.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Yearly saving = [(final goal)(yearly interest rate)]/[(1+yr.int.rate)^n - 1]
R=[Si]/[(1+i)^n - 1]
R=[40,000(0.05)]/[(1+0.05)^6 - 1]
R=2000/0.34=$5882.35 (yearly saving required)
Cheers,
Stan H.
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