Missing information:
interest rate earned = 2.4%
price of motorcycle = $5,000
time = 3 years
Answer:
$403.09
Explanation:
annuity payment = future value / {[(1 + r)ⁿ - 1] / r}
future value = $5,000
r = 2.4% / 4 = 0.6%
n = 3 x 4 = 12
annuity payment = $5,000 / {[(1 + 0.006)¹² - 1] / 0.006} = $5,000 / 12.4040 = $403.09
Lashonda will need to invest $403.09 every three months in order to save $5,000 by the end of the third year.
