You are saving towards the purchase of an electric car in 10 years. You intend to save $X annually starting a year from today. However, due to some other obligations you won't be able to deposit $X in the 9th or 10th year towards your savings. What is $X, if you intend to purchase a car that costs $75,000 in 10 years and your savings can earn 10% annually?

Your savings goal is to have $40,000 in 10 years. You deposit $1,000 at the end year 1, $2,000 in year 2, $3,000 in year 3, $4,000 in year 4, $5,000 in year 5, followed by depositing $X in years 6 to 10. What is $X if you can earn 5% per year. 

You will receive the following stream of payments: $100 one year from today, $200 three years from today, and $300 five years from today. Calculate the PV of this stream of payments knowing that the annual discount rate is 7%. 

Answer rating: 100% (QA)

Solving for X in Different Savings Scenarios Scenario 1 Future Value FV of the car in 10 years 75000 ... View the full answer