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You are saving money to buy a laptop computer, one with "lots of horsepower" and fast...

You are saving money to buy a laptop computer, one with "lots of horsepower" and fast memory so that you can run 3D CAD software. In one year, you will need $2247 for the purchase. How much should you save each month for 12 months, starting at the end of next month, to reach your goal if the effective monthly interest rate is 0.40%? Answer tolerance: +/- $2.00

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Answer #1

FV = $ 2247

i = 0.4% (effective)

t = 12 months

Savings each month = S

S x (1 + 0.4%)11 + S x (1 + 0.4%)10 +.... + S x (1 + 0.4%)0 = 2247

S = $ 183.17

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