You plan to buy a house in three years and would like to put $100,000 down at the time of buying. You would like to save the money today so that you will have $100,000 in three years. Your savings account offers 6% APR, compounded monthly. How much money do you need to deposit in your savings account now in order to have $100,000 in three years, without making any other deposits? if you decide to make monthly deposits in the savings account at the end of each month for the next three years; instead of making one single deposit now, what will your monthly deposits be in order for you to have $100,000 at the end of three years? Now, assume you currently have $80,000. Will you have enough money in three years if you invest all the money in this account, now, as a single deposit? If not, what should the APR of this savings account be for you to achieve $100,000 in three years, still assuming monthly compounding? ***PLEASE TYPE OUT ANSWER, DO NOT HAND WRITE IT.
You plan to buy a house in three years and would like to put $100,000 down at the time of buying. You would like to save the money today so that you will have $100,000 in three years. Your savings account offers 6% APR, compounded monthly.
-
How much money do you need to deposit in your savings account now in order to have $100,000 in three years, without making any other deposits?
-
if you decide to make monthly deposits in the savings account at the end of each month for the next three years; instead of making one single deposit now, what will your monthly deposits be in order for you to have $100,000 at the end of three years?
-
Now, assume you currently have $80,000. Will you have enough money in three years if you invest all the money in this account, now, as a single deposit? If not, what should the APR of this savings account be for you to achieve $100,000 in three years, still assuming monthly compounding?
***PLEASE TYPE OUT ANSWER, DO NOT HAND WRITE IT.
Step by step
Solved in 4 steps with 6 images
