Finance. A person wishes to have $21,900 cash for a new car 7 years from now....

Finance. A person wishes to have $21,900 cash for a new car 7 years from now. How much should be placed in an account now, if the account pays 5.5% annual interest rate, compounded weekly?

Expert Solution

We use the formula:
A=P(1+r/52)^52n
where
A=future value
P=present value
r=rate of interest
n=time period.

21900=P*(1+0.055/52)^(52*7)

P=21900/(1+0.055/52)^(52*7)

=21900*0.680589096

=$14904.90(Approx)

jeff jeffy answered 2 years ago

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Finance. A person wishes to have $21,900 cash for a new car 7 years from now....

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