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What amount do you need to save today to meet

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Alternatively, P = F/ert. P tells you the most you should loan or the most you need now to save to meet future goal F. Thus, if a borrower tells you that he needs a loan for 6 years and 3 months and will pay you an annual rate of 5 1/2% for the loan but will give you only $141.02 back at the end of the loan term, you should only loan him $100 today. In 6 years, you plan to spend $35500 on a new car. Assuming you can earn 3 1/2% annually on your savings, what amount do you need to save today to meet your goal 6 years hence?

Reference no: EM132342569

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