My question is: Mike is saving up to buy a house. He puts away 10% of his $150,000 a year salary. He needs to save up 20% of the cost of a $450,000 house for a downpayment. How long will it take? Your thoughts:
He saves 150,000 * .1 = $15,000 per year. He needs 450,000 * .2 = $90,000. So he needs to save for 90,000 / 15,000 = 6 years. The final answer: 6.