In: Finance
Suppose you'd like to save enough money to pay cash for your next car. The goal is to save an extra $22,000 over the next 3 years. What amount must be deposited quarterly into an account that earns 4.7% interest in order to reach your goal? Round your answer to the nearest cent, if necessary.
Ans $ 1717.85
P = | Periodic payments |
r = | rate of interest |
n = | no of years |
Future Value of Annuity = | P ( (1 + r)^n - 1 ) / r |
22000 = | P * ((1 + 4.7%/4)^12 - 1) / (4.7%/4) |
22000 = | 12.8066920615763 * P |
P = | 22000 / 12.8066920615763 |
P = | 1717.85 |