John Wants to Buy a Laptop Computer in One Year

question 54

Essay

John wants to buy a laptop computer in one year. He is working part time earning $600 per month. The computer John wants to buy costs $2 000. He decides to invest money in securities that pay a monthly rate of 2%. How much should John put aside every month to accumulate the required amount?

---

Definitions:

Labor

The body of physical and mental effort used in the production of goods and services.

Isocost Line

A graphical representation showing all possible combinations of inputs that cost the same amount.

Capital

Refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the tangible machinery and production equipment used in environments such as factories and other manufacturing facilities.

Labor

The physical and mental effort used in the production of goods and services.