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In: Finance

Suppose you'd like to save enough money to pay cash for your next car. The goal...

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.

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Expert Solution

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

jeff jeffy answered 3 years ago
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