In: Finance
Nicholas Matveev wants to take a year-long cycling trip through South America in three years. He will have to pay $5,000 costs at the start of the trip and then $1,000 per month for 12 months. Assume the monthly payments are at the end of the month. He has $1,000 saved now. How much must he save each month until the trip if he earns 0.2% interest per month?
Enter the stroke in the financial calculator -
We have to calculate the Present value 1000 per month for 12
month
PMT = -1000
N = 12
I/Y = 0.2
CPT -PV = 11845.45
we have to need $ 5000 + 11845.45 after 3 years i.e
16845.45
we have to calculate how much he save each month untill the
trip
Enter the Stroke in the financial calculator -
PV = -1000
FV = 16845.45
N = 36 ( 12*3 = 36 months)
I/Y = 0.2
CPT -PMT = -422.94
He have to save 422.94 per month