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finance

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can anyone help me set up this problem bc im totally lost....

if a house = $125,000 you want to buy this house in 10 years its expected to increase 5% a year over a 10 year period assuming you can earn 10% annually on investment. how much should you invest at the end of each of the next 10 years to be able to buy that house?

  • finance -

    A calculator with an exponential function (or an Excel spreadsheet) is very helpful for solving this kind of problem. In 10 years the house will cost 125000*(1.05)^10 =203612.

    Solve for X where X*(1.10)^10 = 203612. I get 78501.

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