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Mary needs $145,000 in 15 years to buy her son a new Ferrari. Assume that she can earn an 8% after-tax return on her investment. You may ignore inflation in these calculations.
-How much does Bob need to invest for each of the next ten years to fulfill his needs?

Question

Quizplus · Accepted Answer

To find the annual investment needed, we use the future value of an annuity formula. Solving for the annual investment, we find that Mary needs to invest approximately $23,721 each year for 10 years at an 8% return to reach $145,000 in 15 years.

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