Rosa Burnett needs $4,000 in three years to make the down payment on a new car. How much must she invest today if she receives 2.5% interest annually,compounded annually?Click the icon to view the present value of $1.00 table.She must invest $(Round to the nearest cent as needed.) Rate per periodPeriods4%5%6%8%10%12%0.5%0.99502 0.99010 0.98522 0.98039 0.97561 0.97087 0.96154 0.95238 0.94340 0.92593 0.90909 0.892860.99007 0.98030 0.97066 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.85734 0.82645 0.797190.98515 0.97059 0.95632 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.79383 0.75131 0.711780.98025 0.96098 0.94218 0.92385 0,90595 0.88849 0.85480 0.82270 0.79209 0.73503 0.68301 0.635520.97537 0.95147 0.92826 0.90573 0.88385 0.86261 0.82193 0.78353 0.74726 0.68058 0.62092 0.567430.97052 0.94205 0.91454 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.63017 0.56447 0.506630.96569 0.93272 0.90103 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.58349 0.51316 0.452350.96089 0.92348 0.88771 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.54027 0.46651 0.403880.95610 0.91434 0.87459 0.83676 0,80073 0.76642 0.70259 0.64461 0.59190 0.50025 0.42410 0.360610.95135 0.90529 0.86167 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.46319 0.38554 0.321970.94661 0.89632 0.84893 0.80426 0.76214 0.72242 0.64958 0.58468 0.52679 0.42888 0.35049 0.287480.94191 0.88745 0.83639 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.39711 0.31863 0.256680.93722 0.87866 0.82403 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.36770 0.28966 0.229170.93256 0.86996 0.81185 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.34046 0.26333 0.204620.92792 0.86135 0.79985 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.31524 0.23939 0.182700.92330 0.85282 0.78803 0.72845 0.67362 0.62317 0.53391 0.45811 0.39365 0.29189 0.21763 0.163121%1.5%2%2.5%3%1234.6.7810111213141516

Future value required for car = $4,000 Interest Rate = 2.5% Time period = 3 years

Answered: Rosa Burnett needs $4,000 in three…

Rosa Burnett needs $4,000 in three years to make the down payment on a new car. How much must she invest today if she receives 2.5% interest annually, compounded annually?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

See similar textbooks

Related questions

Q: The Weidmans want to save $40,000 in 2 years for a down payment on a house. If they make monthly…

A: Given that;Future value is $40000Interest rate is 12%We need to take the present value as $0

Q: Jimmy wants to buy a taxi 6 years later. He will need $550,000 as the down payment. He initially…

A: Part (a): Answer: Annual effective rate of interest is 6.14%

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: Joan Tanaka borrows $80,000 at 14 percent interest toward the purchase of a vacation home.Her…

A: Given: Loan amount = $80,000 Interest rate = 14% Years = 25

Q: A housewife bought a brand new washing machine costing P12,000 if paid in cash. However, she can…

A: Present value of annuity due can be used to calculate the periodic payment.

Q: A person needs $18,000 immediately as a down payment on a new home. Suppose that she can borrow…

A: Continuously compounded interest rate refers to the interest rate that is calculated on the…

Q: you wish to save $30,000 as a down payment for a house in 7 years. How much must you save every year…

A: Given: FV =$30000NPER =7 YearsRate of Interest =4%

Q: Susan Orman wants to pay $1500 semiannually to her granddaughter for 10 years for helping her around…

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: Kym plans to deposit $100 in an account at the end of each month for the next five years so that she…

A: The monthly payment is $100 for the next five years at 6% compounded monthly. Future value of an…

Q: Bobby Sue’s landlady has agreed to sell her the house she is renting for $260,000 in 4 years. Her…

A: Future Value of Annuity = PMT [((1 + r)n - 1) / r] r = periodic rate n = number of periods PMT =…

Q: If you desire to have $80,000 for a down payment for a house in 7 years, what amount would you need…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Fatzamata and Maggie have $30,000 for a down payment on a future house. Their budget can accomodate…

A: Given: Amount available for downpayment : $30,000 Monthly mortgage payment: $1200 The amount owed to…

Q: A beach house in Didim now costs 950,000₺. Inflation is expected to cause this price to increase at…

A: value of house after 30 years= Value Given *(1+inflation rate)^n Inflation Rate= 10% per annum total…

Q: Gertrude wants to make $500 monthly withdrawals for 10 years from an account which pays 4%…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Freya plans to invest $1,600 every six months for 25 years. How much will this investment be worth…

A: Given information: Investment every 6 months : $1,600 Time period : 25 years Rate of interest : 8.2%

Q: Sarah wants to have $20,000 in nine years. If she puts the money in an account which pays 4%…

A: For solving we have to calculate present value of future value considering compounding monthly…

Q: Hannah wants to have $ 7500 to help pay for a new deck in 16 years. If she wants to put her money…

A: GIVEN, Future Value = $7500 Interest rate(r) = 6.25/100 = 0.0625 Time Period(t) = 16 years Present…

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: A woman wishes to save $20,000 for a down payment on a home. She can afford to set aside $1100 per…

A: The concept of the time value of money states that the same amount of money is worth more now than…

Q: Mary decided to begin saving towards the purchase of a new car in 5 years. If Mary put $500 at the…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: Francine currently has $70,000 in her 401k account at work, and plans to contribute $5,000 each year…

A: Future value of single sum/lump sum investment and annuity payments can be calculated by using this…

Q: Helen thinks she will need to replace the fence around her business in 6 years at an estimate of…

A: In this question one has to solve the present value. Now present value is the value of an asset in…

Q: Natalie’s RRSP is currently worth $250,000. She plans to contribute for another five years, and then…

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

Q: How much money should she save at the beginning of each 3 months

A: Value at a future point of time is equal to sum of savings made and interest on those savings.…

Q: Anna is buying $17,000 worth of rare coins as an investment. The dealer is charging her an annual…

A: Add-on interest loans combine the principal and interest into one amount that is owed and later paid…

Q: John paid $25,000 down on a new house and will pay $1000 per month for 30 years. If interest is 8%…

A: Selling Price of the House = Down Payment + Present Value of monthly payments Down Payment = $25000

Q: How much is the cash price of the car if Mrs Ocampo is to pay Php 21,000 monthly in 5 years? The…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Kristi Perez puts $10,500 into an account to save money to buy a car in 12 years. She expects the…

A: We require to calculate the interest rate from following details given in the question: Current…

Q: The Weidmans want to save $25,000 in 4 years for a down payment on a house. If they make monthly…

A: FORMULA FOR MONTHLY PAYMENT: PMT = P×rm1-1+rm-m×n p = principal r= rate of interest m = frequency of…

Q: Mary wants to have $14000 for a trip to Mexico in five years. How much does she need to deposit at…

A: The future value of annuity would be considered the value accumulated in future with a view to…

Q: Bob has saved $ 5000 towards the purchase of a car costing $ 7000. For how many months does Bob need…

A: When the interest is computed on the principal amount along with all the previously accumulated…

Q: Bria has $450,000 saved for retirement in an account earning 2.4% interest, compounded weekly. How…

A: Future Value:-It is the value of an investment at a future date based on the growth rate. It helps…

Q: Anna is buying $16,000 worth of rare coins as an investment. The dealer is charging her an annual…

A: Principal = $16,000 rate = 7.2% Interest for 48 months = $16,000*7.2%*4 = $4608

Q: The Jones want to save $95,000.00 in 5 years for a down payment on a house. If they make monthly…

A: A down payment is often paid in cash in the early stages of a purchase of an expensive service or…

Q: A person needs $17,700 immediately as a down payment on a new home. Suppose that she can borrow…

A: Borrowing Amount = 17,700 Semi Annual Installments Time Period = 20 semi annual periods Interest…

Q: Sofia and Manuel are purchasing a home. They wish to save money for 15 years and purchase a house…

A: Given: Time =15 yearsMonths =15×12=180Value of House =$200000Rate =5% compounded…

Q: To finance a vacation in 4 years, Elsie saves $450 at the beginning of every six months in an…

A: Future Value The future value is the amount that will be received at the end of a certain period.…

Q: For my newly purchased car, I have to pay five year-end installments of P250,000 each year for the…

A: Year end installment = P 250,000 Second year maintenance cost = P 10,000 Annual increase in…

Q: Jennifer Creek is saving up for a new car. She wants to finance no more than $10,000 of the $26,000…

A: The future value function can be used to determine the future value of a present sum of cash flow,…

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

A: Loan amount (PV) = $ 12000 Interest rate = 6.5% Monthly interest rate (r) = 6.5%/12 =…

Q: In 4 years, Jennifer Videtto will need to purchase a delivery van for her plumbing company. She…

A: Present value refers to the current value of future stream of cash flows at a given specified rate…

Q: Rosa Burnett needs $6,000 in three years to make the down payment on a new car. How much must she…

A: Workings: Amount…

Q: If you desire to have $10,000 for a down payment for a house in five years, what amount would you…

A: Calculation of Amount to Deposit Today:The amount to deposit today is $7,835.26.Excel Spreadsheet:

Question

Rosa Burnett needs $4,000 in three years to make the down payment on a new car. How much must she invest today if she receives 2.5% interest annually,
compounded annually?
Click the icon to view the present value of $1.00 table.
She must invest $
(Round to the nearest cent as needed.)

Rate per period
Periods
4%
5%
6%
8%
10%
12%
0.5%
0.99502 0.99010 0.98522 0.98039 0.97561 0.97087 0.96154 0.95238 0.94340 0.92593 0.90909 0.89286
0.99007 0.98030 0.97066 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.85734 0.82645 0.79719
0.98515 0.97059 0.95632 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.79383 0.75131 0.71178
0.98025 0.96098 0.94218 0.92385 0,90595 0.88849 0.85480 0.82270 0.79209 0.73503 0.68301 0.63552
0.97537 0.95147 0.92826 0.90573 0.88385 0.86261 0.82193 0.78353 0.74726 0.68058 0.62092 0.56743
0.97052 0.94205 0.91454 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.63017 0.56447 0.50663
0.96569 0.93272 0.90103 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.58349 0.51316 0.45235
0.96089 0.92348 0.88771 0.85349 0.82075 0.78941 0.73069 0.67684 0.62741 0.54027 0.46651 0.40388
0.95610 0.91434 0.87459 0.83676 0,80073 0.76642 0.70259 0.64461 0.59190 0.50025 0.42410 0.36061
0.95135 0.90529 0.86167 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.46319 0.38554 0.32197
0.94661 0.89632 0.84893 0.80426 0.76214 0.72242 0.64958 0.58468 0.52679 0.42888 0.35049 0.28748
0.94191 0.88745 0.83639 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.39711 0.31863 0.25668
0.93722 0.87866 0.82403 0.77303 0.72542 0.68095 0.60057 0.53032 0.46884 0.36770 0.28966 0.22917
0.93256 0.86996 0.81185 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.34046 0.26333 0.20462
0.92792 0.86135 0.79985 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.31524 0.23939 0.18270
0.92330 0.85282 0.78803 0.72845 0.67362 0.62317 0.53391 0.45811 0.39365 0.29189 0.21763 0.16312
1%
1.5%
2%
2.5%
3%
1
2
3
4.
6.
7
8
10
11
12
13
14
15
16

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
Ingrid wants to buy a $17,000 car in 8 years. How much money must she deposit at the end of each quarter in an account paying 5.3% compounded quarterly so that she will have enough to pay for her car? How much money must she deposit at the end of each quarter? $ (Do not round until the final answer. Then round to the nearest cent as needed.)
K. Tanja wants to establish an account that will supplement her retirement income beginning 30 years from now. Find the lump sum she must deposit today so that $400,000 will be available at time of retirement, if the interest rate is 10%, compounded quarterly. How much must Tanja invest? P= (Round to the nearest cent as needed.)
Ms. H wants to save $1500 over the next two years to use as a down payment on a new car. If her bank offers her 5%interest, what monthly payment would she need to put into an ordinary annuity in order to reach her goal? Round to thenearest cent.
Amanda is going to invest to help with a down payment on a home. How much would she have to invest to have $23,400 after 9 years, assuming an interest rate of 1.79% compounded annually? Do not round any intermediate computations, and round your final answer to the nearest dollar. If necessary, refer to the list of financial formulas.
Carol wants to invest money in an investment account paying 10% interest compounding semi-annually. Carol would like the account to have a balance of $53,000 three years from now. How much must Carol deposit to accomplish her goal? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1).
Rosie is buying a car for $25,500; She is Scheduled to make 7 annual instalments. Given an interest rate of 8%, what is the annual payment? (can you also show me the formula that you are using thanks)
Holly Krech is planning for her retirement, so she is setting up a payout annuity with her bank. She wishes to receive a payout of $1,900 per month for twenty years. (a) How much money must she deposit if her money earns 7.8% interest compounded monthly? (Round your answer to the nearest cent.)___________ $ (b) Find the total amount that Holly will receive from her payout annuity. Thank you!
The Fergusons want to purchase their first home and need $14,300 for a down payment. They can save $1,025 per quarter. If they deposit this amount in an account paying 3% interest compounded quarterly, how long will it be before they can purchase a home? (Solution should be entered in years accurate to the hundredths decimal place)
Kristy Joe deposits $130 each month in an ordinary annuity to save for a new car. If the annuity pays a monthly interest rate of 0.91%, how much will she be able to save in 5 years? Assume that the compounding is being done monthly. She will be able to save $ in 5 years. (Round to the nearest cent as needed.) Enter your answer in the answer box and then click Check Answer. All narts showing teljavascript:doExercise(7): Clear All Check Answer answers to questions asked by student like you 99 a
Ingrid wants to buy a $20,000 car in 8 years. How much money must she deposit at the end of each quarter in an account paying 5.5% compounded quarterly so that she will have enough to pay for her car? How much money must she deposit at the end of each quarter? $ (Round to the nearest cent as needed.)
To help with a down payment on a home, Elsa is going to invest. Assuming an interest rate of 1.73% compounded annually, how much would she have to invest to have $36,800 after 7 years? Do not round any intermediate computations, and round your final answer to the nearest dollar. If necessary, refer to the list of financial formulas. $0 S oo E D