I need help going about solving these problems, by showing work. I can't figure out the correct formula.
1. You would like to take a cruise in six years. The cruise currently costs $4,250. You expect the price to increase by 4% annually. You can earn 5% on your savings. How much do you need to save at the end of each month so you will be able to afford your cruise in six years?
Amount in six years $5733.61 $76.00 per month
2. You invest $250 in your savings account at the end of each year and earn an average of 6% per year in interest. How much will you have in your savings account at the end of forty years?
3. You want to have $40,000 to buy a new boat in six years. How much do you have to save at the end of each year to reach this goal if you earn 5% a year on your savings?© BrainMass Inc. brainmass.com June 3, 2020, 6:36 pm ad1c9bdddf
1) this is an annuity problem
step 1 - find how much the trip will cost in 6 years.
=4250 (1.04)^6 = 5377
So that is how much money you will need to save.
So you have 6 years, and you want to pay monthly = ...
Organizing and Managing Your Financial Resources is advised.