Question

Your company wants to save $165,000 to buy new equipment 42 months from now. The plan...

Your company wants to save $165,000 to buy new equipment 42 months from now. The plan is to set aside an equal amount of money on the first day of each quarter starting today. The company can earn 6.25% annually. How much does the company have to save each quarter to achieve the goal?

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Answer #1

The Saving of the firm each quarter is calculated below

The Formula used to calculate the saving of the firm each quarter is provided below.

Since 42 months, we convert to quarters =42/3 = 14 quarters

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