Homer Simson wants to eat more donuts in the future. He wants to be able to buy $6,200 of donuts in 5 years. The bank is offering four-year investment certificates that pay 5% nominal interest, compounded quarterly. How much money should he save from not drinking beer at Moe's in the next year to be able to invest in the 4 years investment and reach his goal after 5 years?
Homer Simson wants to eat more donuts in the future. He wants to be able to buy $6,200 of donuts in 5 years. The bank is offering four-year investment certificates that pay 5% nominal interest, compounded quarterly. How much money should he save from not drinking beer at Moe's in the next year to be able to invest in the 4 years investment and reach his goal after 5 years?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 28P
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Transcribed Image Text:BONUS
Homer Simson wants to eat more donuts in the future. He wants to be able to buy
$6,200 of donuts in 5 years.
The bank is offering four-year investment certificates that pay 5% nominal interest,
compounded quarterly.
How much money should he save from not drinking beer at Moe's in the next year to
be able to invest in the 4 years investment and reach his goal after 5 years?
$5,082
$4,759
$5,101
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