Jane wants to set aside funds to take an around the world cruise in four years. Jane expects that she will need $12,000 for her dream vacation. If she is able to earn 8% per annum on an investment, how much will she need to set aside at the beginning of each year to accumulate sufficient funds?
A) $2,663.
B) $16,325.
C) $8,820.
D) $2,466.

Question

Quizplus · Accepted Answer

The future value of $1 at 8% for four years is $1.3605. To accumulate $12,000, Jane will need to set aside $12,000/$1.3605 = $8,820 at the beginning of each year.

Jane Wants to Set Aside Funds to Take an Around