John wants to have $6,215 in 13 years to buy a Laser 2 sailboat with a spinnaker and trapeze.After he has owned the boat for 15 years he will need $2,500 for hull maintenance.How much must he deposit at the end of each year for the next 13 years to save enough money for the purchase and maintenance? His savings account pays 9%.
A) $300.67
B) $267.61
C) $213.02
D) $270.77
E) $211.68

Question

Quizplus · Accepted Answer

Step 1 - Calculate the present value of $2,500 you will need in 15 years.
PV = 11ea7fdb_fc16_818f_a768_e10b473cc0a8_TB2902_11 PV = 11ea7fdb_fc16_a8a0_a768_9bbc2972d8ad_TB2902_11 = $686.35
Step 2 - Calculate how much you will need to invest for the future.
FV = PMT × 11ea7fdb_fc16_a8a1_a768_f755b09647b0_TB2902_11 PMT = FV / 11ea7fdb_fc16_a8a2_a768_03c7b7718979_TB2902_11 PMT = (6,215 + 686.35) / 11ea7fdb_fc16_a8a3_a768_91eb4b9c0149_TB2902_11 = $300.67
Using a financial calculator:
N = 13, I/Y = 9, PV = 0, FV = -6,901.35, cpt PMT = $300.67

John Wants to Have $6,215 in 13 Years to Buy