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COMPOUNDED INTEREST

The current cost of a cruise you wish to take in 6 years is $4,250.00. You expect it will increase by 4% annually.

I can earn 5% on my savings. How much do I need to save at the end of each month so I can afford to take the cruise in six years?

Note: I understand that I need to consider the future amount. Future amount= 4250 x 1.04 ^6= 4250 x 1.27= $5377.61. Where did the 1.27 come from that is used to multiply the 4250.00 by?

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COMPOUNDED INTEREST

The current cost of a cruise you wish to take in 6 years is $4,250.00. You expect it will increase by 4% annually.
I can earn 5% on my savings. How much do I need to save at the end of each month so I can afford to take the cruise ...

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Very detailed step by step solution is provided.

$2.19