Future value You have just started a side business making erasers for pencils. Your goal is to make enough to buy the house you desire on the lake. The house costs $200,000 and you want to buy it ten years from now.

You think you can make a profit of $18,000 the first year. After that, you believe that the revenues can grow by 10 % each year for the remaining nine years. Assuming you deposit every penny of profit in an account earning 6.8 %, compounded annually, will you have enough to buy the house at the end of ten years? If so, how much will you have left over? If not, how much are you lacking?