You’re trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.6 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
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You’re trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.6 percent annual interest on its accounts.
How long will it be before you have enough to buy the car?
The savings in a bank earn compound interest as the money of the account holder earns interest in a period which is then added to the account. This new balance earns interest in the next period which is why it is referred to as interest on interest.
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- If you are saving the same amount each month in order to buy a new sports car when the new models are released, which of the following will help you determine the savings needed? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityUse the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?You are trying to save to buy a new $230,000 Ferrari. You have $31,000 today that can be invested at your bank. The bank pays 4.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
- You’re trying to save to buy a new 275,000 Ferrari. You have 50,000 today that can be invested at your bank. The bank pays 4.8 percent annual interest on its accounts. How long will it be before you have enough to buy a car?You are considering buying a new car worth $I5,000. You can finance the car either by withdrawing cash from your savings account, which earns 8% interest compounded monthly, or by borrowing $I5,000 from your dealer for four years at 11% interest compounded monthly. You could earn $5,635 in interest from your savings account in four years if you leave the money in the account. If you borrow $15,000 from your dealer, you pay only $3,609 in interest over four years, so it makes sense to borrow for your new car and keep your cash in your savings account. Do you agree or disagree with the foregoing statement? Justify your reasoning with a numerical calculation.You want to have $35,000 in cash to buy a car 3 years from today. You expect to earn 3.6 percent, compounded annually, on your savings. How much do you need to deposit today if this is the only money you save for this purpose? Can the excel and calculator solution be provided?
- Unfortunately it costs $25,000, it you want to the purchases the car in five years and in the meantime you can place money in a bank account that pays 10% interest per year, how much money do you need to put into your account today to be able to buy this car in five years?You want to save up enough money to purchase a new computer, which costs $4,500. You currently have $4,000 in your bank account. If you can earn 8% per year by investing this money, how long will it take before you have enough money in your bank account to buy the new computer? _______years (keep at least two decimal places)You found the perfect car but costs $30,000. How much is your monthly payments if your bank charges 2 5% interest for 5 years?
- You need $30000 in cash to buy a car 15 years from today. You expect to earn 14 percent, compounded annually, on your savings. How much do you need to deposit today if this is the only money you save for this purpose?You expect to save $450 at the end of each month for the next four years towards a car. Your parents will give you $3,000 today for you to save towards the car. How much will you have in four years, if you can earn 6.25% per year on your savings towards the car? $20,618 $28,317 $5,799 $26,455Suppose you decide to wait 5 years to save up before buying the house. You are able to put a down payment of $30,000 on the house, so that you only need to borrow $170,000 from the bank. Assume the interest rate is still the same, but you are now in a better financial position, and you can pay off the loan in 240 equal monthly payments. Answer the following questions about this loan. After making 240 monthly payments, how much of what you paid the bank was interest? $ . ROUND TO THE NEAREST CENT. THANKS APPRECIATE THE HELP!!!
