Plan on making your first savings deposit

Assignment Help Financial Management

Reference no: EM131185209

You saving up to buy a car, you plan on making your first savings deposit one year from today, and then making deposits for the following 3 years. These are the amounts you plan to save at the end of each year:

Year 1 Projected Savings Amount $6000

Year 2 Projected Savings Amount $6000

Year 3 Projected Savings Amount $7000

Year 4 Projected Savings Amount $7000

You expect to earn an annual rate of 6% per year throughout. What amount will you have available at the end, at the time 4, when you will buy the car?

A $21308 B $28308 C $7420 D $26000 E $27560

Reference no: EM131185209

Questions Cloud

Ski resort is considering installing new ski lift : The owner of a ski resort is considering installing a new ski lift, which will cost $750,000. Expenses for operating and maintaining the lift are estimated to be $1,500 per day when operating. The owners wish to recover any invested capital within fi..

Calculation the present value and cash payment reduction : Please calculation the Present value and cash payment reduction. Company B agrees to pay Company A $200,000 at the end of each of the next 5 years, with discount rate 7%.

Organizing reports-structuring analytical reports : Three years ago, your company (a carpet manufacturer) modernized its Georgia plant in anticipation of increasing demand for carpets. Because of the depressed housing market, the increase in demand for new carpets has been slow to materialize. Georgia..

Calculate the payment net of discount : A store offers two payment plans. Under the installment plan, you pay 12.5% down and 12.5% of the purchase price in each of the next 7 years. If you pay the entire bill immediately, you can take a 15% discount from the purchase price. Calculate the p..

Plan on making your first savings deposit : You saving up to buy a car, you plan on making your first savings deposit one year from today, and then making deposits for the following 3 years. These are the amounts you plan to save at the end of each year: You expect to earn an annual rate of 6%..

Discuss how we actually derive a budget : Let's discuss how we actually derive a budget. Discuss the five basic steps of budgeting and how each are determined. What are some of the difficulties that can arise in this process, specifically for HCO's?

Most glaring issue with IRR via an example : Let’s examine the most glaring issue with IRR via an example. A friend offers you an "investment." He knows that every year there is one day when some lottery numbers are fixed. Based on his insider knowledge, if you invest $2 with him, he will retur..

Compare the yield-to-maturity to the IRR : Bond par value $1,000. Semi-annual coupon payments $40. Matures in 10 years. Current bond price $960. What is the payback period? What is the IRR? What is the NPV, (discount rate of 4%)? For this bond investment, compare the yield-to-maturity to the ..

User Account

All Pages