ngela wishes to buy a boat in five years that presently costs $150,000. She expects the cost of the boat to increase due to inflation by 3% per year for the next two years and 4% per year the following three years. She also wants to spend $50,000 per year for 6 years beginning at the end of 10 years from today. How much must she save each year for the next 5 years if she can earn 6% on her investments?
ngela wishes to buy a boat in five years that presently costs $150,000. She expects the cost of the boat to increase due to inflation by 3% per year for the next two years and 4% per year the following three years. She also wants to spend $50,000 per year for 6 years beginning at the end of 10 years from today. How much must she save each year for the next 5 years if she can earn 6% on her investments?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Angela wishes to buy a boat in five years that presently costs $150,000. She expects the cost of the boat to increase due to inflation by 3% per year for the next two years and 4% per year the following three years. She also wants to spend $50,000 per year for 6 years beginning at the end of 10 years from today. How much must she save each year for the next 5 years if she can earn 6% on her investments?
a. $66,302.67
b. $64,347.13
c. $65,946.95
d. $61,349.81
e. None of these are correct
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