James wants to buy a car in 5 years. The car is expected to cost $30,000 at that time. How much money would James need to put as a single lump-sum amount today in a savings account earning 4% per year in order to accumulate that $30,000 in five years?

Q: Spencer would like to purchase a new car for $12,000.  How much will his monthly payments be if he…

A: The monthly payment amount can be calculated with the help of present value of annuity function.

Q: Colin has inherited $6,000 from the death of Grandma Anna. He would like to use this money to buy…

A: The Future Value of a lumpsum investment: The future value of a single investment (lumpsum) made now…

Q: Barry plans to invest $350 a month for the next 30 years, how much money will he have in his account…

A: Given data, monthly payment = $350 number of years = 30 years annual rate = 12%   To calculate the…

Q: Mr. and Mrs. Revilla decided to sell their house and to deposit the fund in a bank. After computing…

A: Determine the present value of the annual withdrawals after 5 year of deposit using the Excel PV…

Q: Alexis and Will are purchasing a home. They wish to save money for 10 years and purchase a house…

A: formula to find future value of annuity: fva=A×1+rmm×n-1rmwhere,A= annuityr = rate of interestm =…

Q: A father is now planning a savings program to put his daughter through college. She is 13, plans to…

A: Solution: Current annual cost is $13,000 and these costs expected to increase by 6% annually.…

Q: James and Kate would like to have $30,000 in 6 years in order to purchase anew mini van. What amount…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: Ingrid wants to buy a $22,000 car in 6 years. How much money must she deposit at the end of each…

A: Future Value = $22,000 Time Period = 6 Years Interest Rate = 5.8%

Q: Bill O’Brien would like to take his wife, Mary, on a trip three years from now to Europe to…

A: Future value:

Q: Your parents plan to spend $20,000 on a car for you upon graduation from college. If you will…

A: Present value is a current value of future cash flows at a given rate. It is given as: P.V =…

Q: Benji wants to purchase a new car in 4 years. He plans on putting $8,000 down. He will be putting a…

A: let payment be = A r=9% m=12 (monthly compounding) n =4 FVA = $8000

Q: John wants to buy a car in 5 years. The cost of the car is $30,000 at that time. How much must John…

A: The annual savings required can be calculated with the help of future value of annuity function

Q: Raya is saving for a new car. He needs to have OMR 21000 for the car in three years. How much will…

A: Given: Future value = OMR 21,000 Interest rate = 8% Years = 3

Q: Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual.…

A: Total number of periods or years is 5 years Interest rate is 5% Annual withdrawal is $2000 To Find:…

Q: Chris has saved $500,000 for retirement. If he set up a payout annuity for 30 years in an account…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Ronald has an investment opportunity that promises to pay him $55,000 in three years. He could earn…

A: Present value = Future value * Present value of $1 table factor

Q: Colin thinks he can reasonably expect to buy a house in five years. He would like to have…

A: Calculation of investment (P):Answer:The amount of investment that Colin has to invest annually is…

Q: Suzy wants to buy a house but does not want to get a loan. The average price of her dream house is…

A: Annuity is the recurring cashflow for a fixed interval. Future value of annuity (FVA) formula:…

Q: Michael wants to buy some new exercise equipment for his home gym for ​$123,000 financed at an…

A: The interest payable on the loan is determined at the start of the loan using this approach. The…

Q: Suppose that Charles and Nancy are saving to buy a house. They have $20,000 in the bank, but know…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: Hudson would like to purchase a new car for $25,000.  How much will his monthly payments be if he…

A: The monthly payment amount can be calculated with the help of present value of annuity function

Q: Kayla wants $7,000 saved in 4 years to make a down payment on a house. How much money should she…

A: Amount that needs to be invested now to meet her goal = 5795.20

Q: Rhonda has saved $1,200,000 in an account. Her goal is to have 1,500,000 saved up to use as down…

A: given, pv = $1200,000 n=5 r=2.5%

Q: Lena is regularly saving money in order to buy a new car at the end of 7 years. If the car is 30,000…

A: Cost of Car is 30,000EUR Interest rate is 2% Time period is 7 years or 7×12 = 84 months To Find:…

Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…

A: Given, Discounting rate=6%12 months=0.5% per month Period=5 years×12 months=60 months

Q: What interest (to the closest percent) must she earn in this account to achieve this financial…

A: Interest refers to the cost of money borrowed from a lender. It can be simple or compound. It is…

Q: Dave wants to buy a $25,000 car by making a 10% down payment and financing the rest for five years.…

A: Down payment is defined as an initial partial payment at the time of purchasing an expensive items…

Q: A father is now planning a savings program to put his daughter through college. She is 13, plans to…

A: Inflation rate is the rate at which prices of goods and services increases over a period of time…

Q: Michael is updating his estate plan for himself and his family. He would like to provide an income…

A: Annuity means finite no. of payments which are same in size and made in equal intervals for the…

Q: Matt plans to start his own business once he graduates from college. He plans to save $3,000 every…

A: Compute the semi-annual interest rate as follows: Compute the no. of half-years as follows:

Q: Matt Christopher is a 30-year-old mechanical engineer, and his salary next year will be $80,000.…

A: Computation of the amount that will be saved by Matt Christopher at the age of 60 years is shown:

Q: Tony wants to have $10,000 in 10 years after investing in an account that earns 4.6% compounded…

A: Future value is $10,000 Time period is 10years Interest rate is 4.6% Compounded monthly   To find:…

Q: Hannah wants to have $1500 to help pay for a new deck in 13 years. If she wants to put her money…

A: Present Value = Future value / e^rt Where r = 8.50% t = 13 years

Q: John would like to accumulate $100,000 by the time his son starts college in ten years.  What amount…

A: Given : Future Value =$100,000 Interest Rate = 5% Time = 10 years Compounding frequency per year  i)…

Q: After several years of working, Katy has saved $125,000. If she invests that $125,000 in a savings…

A: Investment = $ 125000 Annual interest rate = 4% Period = 15 Years

Q: Peter and Amy Chambers have saved $4,500.  They are accumulating funds for a down payment on a…

A: If investment gives Simple Interest: Amount after 5 years = Principal + Interest for 5 years = 4500…

Q: Suppose that you are obtaining a personal loan from your uncle in the amount of $20,000 (now) to be…

A: Present value: The money having at present has more value than receivable in future. Formula: FV =…

Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…

A: Net present value is the technique used in capital budgeting to evaluate the acceptability of the…

Q: Aini wishes to have 93,000USD to purchase a car in 6 years as part of her financial goals. How much…

A: Future Value = 93,000 USD Time Period = 6 Years Interest Rate = 8%

Q: You have just retired with savings of $4 million. If you expect to live for 34 years and to earn 13%…

A: This is the case of an annuity due. This is because money is being spend at the start of each year.

Q: Your parents agree to pay half of the purchase price of a new car when you graduate from college.…

A: The simple interest is calculated by multiplying interest rate by principal amount for a certain…

Q: Michael is updating his estate plan for himself and his family. He would like to provide an income…

A: Solution- Present value of future withrawal ason 10.5 years=Monthly withdrawal ×Present value…

Q: Aunt Zelda’s son starts college in 5 years for which she will need $15,000 payable at the end of…

A: Aunt Zelda will buy an annuity at the beginning of year 5 that will pay $15000 for college at the…

Q: Suppose that, to purchase a car, you are obtaining a personal loan from your uncle in the amount of…

A: Given information: Amount of personal loan is $75,000 Number of years to be repaid is 3 years…

Q: Your great-aunt wants to help with your college graduation party. She has just placed $5,000 dollars…

A: Future value is the expected value of the current amount at a future date at a given rate of return.…

Q: You are going back to school and anticipate you will need 25,000 a year for living expenses for 6…

A: Using Excel PV function