Question
In: Finance
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?
Solutions
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 agoRelated Solutions
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