7. You plan to save every year and accumulate $150,000 in 6 years to make the downpayment for your house. To achieve your financial goal, you plan to make a depositof $20,000 per year into a bank account paying 6% annual interest. The first depositwill be made a year from today.a. Draw a timeline to visualize the problem.b. Can you achieve your financial goal? (Show your work to answer this question)c.If not, what is the minimum deposit you need to make per year in order to achiveyour goal?8. You are pursuing a Bachelor's in Finance at a business school, and you will need$20,000 per year for the next 4 years to cover your college expenses. That is, youplan to withdraw $20,000 at the end each of the next 4 years, starting one yearfrom today. To support your college education, your parents decide to make adeposit today into a bank account paying an 8% annual interest. This deposit shouldbe sufficient to cover the four $20,000 withdrawals you will make over the next 4years.a. Draw a timeline to visualize the problem.b. How much must the deposit be?c. How much will be in the bank account immediately after you make the secondwithdrawal?

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Answered: You plan to save every year and…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
You need to save $200 000 by making monthly deposit of 100 for 6 years. How much interest must you earn in order to achieve this goal ? Could use excel to solve this and show the step ?
Suppose you would like to save enough money to pay cash for your next car. The goal to save an extra $26,000 over the next 6 years. What amount of quarterly payments must you make into an account that earns 5.5% interest in order to reach your goal?
2. (From section 6.2) You want to be able to withdraw $50,100 from your account each year for 20 years after you retire. You expect to retire in 35 years. If your investment account earns 5.5% interest, how much will you need to deposit into the account at the end of each year until you reach retirement to achieve your retirement goals? (a) The first part is finding how much we need to have in the account by the time we retire. Which formula will you use first? Circle one. Annuity Payout-Annuity (b) What are the following variables that we will need for the formula? PMT = n = t = r = A or Po = (c) Write the formula you will use with the numbers plugged in below. (d) Solve using your calculator or technology and round to two decimal places. Work is not required here. Write the answer here and state which variable you solved for. (e) Using your own words, describe what you found by solving the equation in terms of the word problem given.
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)
USE EXCEL TO SOLVE THE PROBLEM AND SHOW THE EXCEL FORMULA AS WELL! You are hoping to buy a house in the future and recently received an inheritance of $20,000. You intend to use your inheritance as a down payment on your house. a. If you put your inheritance in an account that earns a 7 percent interest rate compounded annually, how many years will it be before your inheritance grows to $30,000? b. If you let your money grow for 10.25 years at 7 percent, how much will you have? c. How long will it take your money to grow to $30,000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $30,000 if you move it into an account that pays 11 percent? d. What does all of this tell you about the relationship among interest rates, time, and future sums?
Today you are opening a savings account and depositing an initial $5,000 into it. You plan to deposit $6,500 into the account two years from today and deposit another $8,000 four years from today. How much will you have in your account five years from today if you earn an 11 percent rate of return? A) $25,314.60 B) $26,194.89 C) $32,858.63 D) $29,602.37 (Please try to explain by using a Financial Calculator)
You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $61,000 at the end of each year for the next 6 years. You expect to earn 11 percent each year. Required: 1. Determine how much you will have saved after 6 years. 2. Determine the amount saved if you were able to deposit $64,000 each year. 3. Determine the amount saved if you deposit $61,000 each year, but with 13 percent interest.
Assume that you wish to save $25,000 in 5 years to remodel your kitchen. Assume that you can earn an annual compound interest of 8% from your savings account.How much do you need to invest today to have $25,000 in 5 years? Give typing answer with explanation and conclusion
Use the savings plan formula to answer the following question. Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 7%. How much should you deposit monthly to accumulate $90,000 in 15 years? ... You should invest $ each month. (Do not round until the final answer. Then round to two decimal places as needed.) ******
suppose you are planning to buy a home in 8 years from now that costs you 47114 OMR, How much should you save each year in your bank account that pays 6.012 percent to reach your goal?

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