Nancy would like to accumulate $10,000 by the end of 3 years from now to buy a used car from her friend,Jin. She has $2,500 now and would like to save equal annual end of year deposits to pay for the car.
Calculate how much should she deposit at the end of each year in an account pay 8% interest to buy the car at the end of 3 years.
 👍
 👎
 👁
 ℹ️
 🚩
1 answer

Amount to save = 10,0002500=7500
Use the future value formula:
A=F*(A/F,0.08,3)
=F(i)/((1+i)^n1)
=7500*0.08/(1.08^31)
=2310.25
Note: each payment is even less than 7500/3=2500 because the first two payments earn interest at 8%. 👍
 👎
 ℹ️
 🚩
answered by MathMate
Answer this Question
Related Questions

maths
Suppose that you want to buy a house 5 years from now, and you estimate that an initial down payment of $30,000 will be required at that time. To accumulate the $30,000, you wish to make equal annual end of year deposits into an account paying annual
 asked by mannat
 1,044 views

Engineering Economy
Maintenance cost of an equipment is P20,000 for 2 years, P40,000 at the end of 4 years, and P80,000 at the end of 8 years. Compute the semiannual amount that will be set aside for this equipment. Money worth 10% compounded annually. My answer is
 asked by Cathy
 4,265 views

Math
A company paid $150,000 for a new 18wheeler. When it is 9 years old it will be worth $42,000. Using straightline depreciation, the value of the truck in dollars, V, is a linear function of its age in years, n. Find the function and the
 asked by Tyler
 3,826 views

math
Marie Coolidge is a new employee. She has five years of experience in a similar job, where she was paid $45,000–$65,000. She has four years of higher education. Her current salary will be $55,000.
 asked by help
 3,074 views

Math
If a nurse deposits $2,000 today in a bank account and the interest is compounded annually at 10 percent, what will be the value of this investment: a. five years from now? B. ten years from now? C. fifteen years from now? D. twenty years from now?
 asked by April
 559 views

Math
Shantle and Kwamie are planning to buy their first home. Although they are excited about the prospect of being homeowners, they are also a little frightened. A mortgage payment for the next 30 years sounds like a huge commitment. They visited a few
 asked by Chol
 721 views

math
A house was purchased for $140,000. Three years later, the value of the house was $155,000. If the value V of the house increased linearly from the date it was purchased, which of the following represents the value, in dollars, of the house t years after
 asked by Kylie
 1,163 views

Business Math
Pete Air wants to buy a used Jeep in 5 years. He estimates the Jeep will cost $15,000. Assume Pete invests $10,000 now at 12% interest compounded semiannually. Calculate the maturity value of the investment
 asked by Jimmy
 3,368 views

financial management
1. Dooley, Inc., has outstanding $100 million (par value) bonds that pay an annual coupon rate of interest of 10.5 percent. Par value of each bond is $1,000. The bonds are scheduled to mature in 20 years. Because of Dooley’s increased risk, investors now
 asked by Anonymous
 1,068 views

math
Your firm has the option of making an investment in new software that wil cost $130,000 today and is estimated to provide the savings shown in the table over5 years. year savings estimate 1 $35,000 2 50,000 3 45,000 4 25,000 5 15,000 should the firm make
 asked by Vanessa
 1,279 views

Math
Cosmic ray bombardment of the atmosphere produces neutrons, which in turn react with nitrogen to produce radioactive carbon14. Radioactive carbon14 enters all living tissue through carbon dioxide (via plants). As long as a plant or animal is alive,
 asked by Shelia
 765 views

Math Interest rates/percents
Calculate the simple interest for each situation. Which choices have a simple interest grater than $800. Select all that apply: $2,000 at 6% for 7 years $4,500 at 3% for 6 years $1,400 at 6% for 9 years $5,000 at 7% for 3 years $800 at 15% for 5 years I
 asked by Ok I Am Yasmine
 2,087 views

math, depreciation
A workcenter system purchased at a cost of $60,000 in 2015 has a scrap value of $12,000 at the end of 4 years. If the straightline method of depreciation is used. a) find the rate of depreciation. b) Find the linear equation expressing the system's book
 asked by lijm
 3,069 views

engineering economy
Maintenance cost of an equipment is P20,000 for 2 years, P40,000 at the end of 4 years, and P80,000 at the end of 8 years. Compute the semiannual amount that will be set aside for this equipment. Money worth 10% compounded annually.
 asked by cathy
 1,038 views

math
A young executive deposits $400 at the end of each month for 7 years and then increases the deposits. If the account earns 7.2%, compounded monthly, how much (to the nearest dollar) should each new deposit be in order to have a total of $400,000 after 25
 asked by worried
 926 views

finance
John Roberts has $42,180.53 in a brokerage account, and he plans to contribute an additional $5,000 to the account at the end of every year. The brokerage account has an expected annual return of 12 percent. If John’s goal is to accumulate $250,000 in
 asked by tippy
 1,252 views

Math
A company paid $110,000 for a new 18wheeler. When it is 9 years old it will be worth $20,000. Using straightline depreciation, the value of the trick in dollars, V, is a linear function of its age in years, n. Find the function and the value when the
 asked by Katherine
 925 views

Logarithmic Functions
Suppose you deposit $2,000 in a savings account that pays interest at an annual rate of 4%. If no money is added or withdrawn from the account, answer the following questions. 1.) How much money will be in the account after 3 years? 2.) How much money will
 asked by dnf
 1,680 views

math
Karen deposits $375 into a savings account which earns simple interest at a rate of 4% per year. She wants to use the interest to buy a new camera. Which price camera could Karen buy at the end of 5 years? SELECT THREE!!. A.$764 B.$52 *** C.$38 D.$75 ***
 asked by frankie :))
 2,313 views

Math
A computer is normally $550 but is discounted to $385. What percent of the original price does Mark pay? A. 16.5% B. 30% C. 65% **D. 70% The $199.99 digital camera Anne purchased was on sale for 15% off. What amount did Anne get off the price? A. $15 B.
 asked by Jaxx
 3,544 views
Still need help?
You can ask a new question or browse existing questions.