The parking lot in Yosemite Valley will need to be repaved i

The parking lot in Yosemite Valley will need to be repaved in 6 years. It will cost $55,000 to repave the parking lot. To have exactly enough money to pay for that repaving, how much money will Yosemite\'s manager put into an account each year between now and the repavement date if that account earns 3% per year?

Solution

F = $55,000

n = 6 years

i = 3%

There fore, A = F(A/F , i , n)

                A = 55,000(A/F , 3% , 6)

                   = 55,000 x 0.1546

                   = $8503

Therefore, Yosemite\'s manager put $8503 into an account each year.