You. are planning to purchase a new vehicle in three years for $40,000. You want to be able to pay cash for your new car when it is time. In the meantime, you can earn 4% on the cash you are saving. The cash is compounded annually. How much must I save out of each year's Christmas bonus over the next three years in order to pay cash for my new car? Hint: You don't have any money in your savings account now. In other words, your PV is $0. A N: I/Y: PV: PMT (Solution): FV: B I !!! ||| lil E W 23 U

You. are planning to purchase a new vehicle in three years for $40,000. You want to be able to pay cash for your new car when it is time. In the meantime, you can earn 4% on the cash you are saving. The cash is compounded annually. How much must I save out of each year's Christmas bonus over the next three years in order to pay cash for my new car? Hint: You don't have any money in your savings account now. In other words, your PV is $0