Question 1138988: maurice eftink owns a lawn design business. his lawnmower cost $7,800 and should last for six years. how much must he set aside each year at 6% annual interest to have enough to buy a new mower?
Found 2 solutions by josmiceli, MathTherapy:
Answer by josmiceli(19441)   (Show Source):
Answer by MathTherapy(10557)  (Show Source):
You can put this solution on YOUR website! maurice eftink owns a lawn design business. his lawnmower cost $7,800 and should last for six years. how much must he set aside each year at 6% annual interest to have enough to buy a new mower?
The answer is NOT $955.88 per year.
The correct answer is derived after calculating the annual payment of the Future Value of an ORDINARY ANNUITY of $7,800.
The formula is:  , where:
 is the future value (FV) of an ORDINARY ANNUITY in the amount of time (years), or the amount that will be available then ($7,800, in this case)
PMT is the payment amount (UNKNOWN, in this case)
i is the interest rate, per year (6%, or .06, in this case)
m is the number of compounding periods per year (1, in this case)
t is the amount of time the money is invested (6, in this case)
Do the calculations and you should get payment or 
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