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Suppose you have the option to buy a parcel of vacant land to build your first home. The option is for a 5-year period, and
Suppose you have the option to buy a parcel of vacant land to build your first home. The option is for a 5-year period, and the purchase price is $65,000. You do not intend to exercise the option until the end of the 5th year, which means you have 5 years to accumulate the required $65,000 in cash to buy the land. Given you have access to a savings account that pays 6 percent interest that compounds annually, how much will you have to save each year?
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