You are preparing to buy a vacation home five years from now. The home will cost $100,000 at that time. You plan on saving three deposits at an interest rate of 10%:Deposit 1: Deposit $12,000 today.Deposit 2: Deposit $15,000 two years from now.Deposit 3: Deposit $ X three years from now.How much do you need to invest in year three to ensure that you have the necessary funds to buy the vacation home at the end of year five?
You are preparing to buy a vacation home five years from now. The home will cost $100,000 at that time. You plan on saving three deposits at an interest rate of 10%:Deposit 1: Deposit $12,000 today.Deposit 2: Deposit $15,000 two years from now.Deposit 3: Deposit $ X three years from now.How much do you need to invest in year three to ensure that you have the necessary funds to buy the vacation home at the end of year five?
Chapter16: Interest, Rent, And Profit
Section: Chapter Questions
Problem 1WNG
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You are preparing to buy a vacation home five years from now. The home will cost $100,000 at that time. You plan on saving three deposits at an interest rate of 10%:
Deposit 1: Deposit $12,000 today.
Deposit 2: Deposit $15,000 two years from now.
Deposit 3: Deposit $ X three years from now.
How much do you need to invest in year three to ensure that you have the necessary funds to buy the vacation home at the end of year five?
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