In 4 years, Jennifer Videtto will need to purchase a delivery van for her plumbing company. She estimates it will require a down payment of $ 10,000 with payments of $ 950 per month for 48 months. (a) Find the total amount needed in 4 years of amortization and compare it to the cash value of delivery van assuming 12% compounded monthly. (b) W nill she have enough if she invests P 2200 at the end of every quarter for 4 years and earns 6% compounded quarterly? What strategy will you recommend?

In 4 years, Jennifer Videtto will need to purchase a delivery van for her plumbing company. She estimates it will require a down payment of $ 10,000 with payments of $ 950 per month for 48 months. (a) Find the total amount needed in 4 years of amortization and compare it to the cash value of delivery van assuming 12% compounded monthly. (b) W nill she have enough if she invests P 2200 at the end of every quarter for 4 years and earns 6% compounded quarterly? What strategy will you recommend?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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