Ruth Wants to Save an Amount of Money to Buy

Essay

Ruth wants to save an amount of money to buy a new computer in two years from now. She estimates that the price of the computer will be $800, and she wants to save the money in two tranches at the beginning of each of the next two years. For simplicity, suppose interest is computed only at the end of the year and Ruth wants to save equal amounts every year. If the interest rate is 10% per year, how much does Ruth need to save every year?