You recently got promoted at your job. You have since decided to buy your dream car...

You recently got promoted at your job. You have since decided to buy your dream car and expect that it will cost you $93,000 seven years from today. After budgeting your expenses, you decide that you can save $9,000 per year at the end of each year. Given a market interest rate of 13%, will you be able to purchase your car at the end of year 7? Would you be able to afford it one year later?

with financial calculator

Expert Solution

Calculating Future Value at the end of year 7,

Using TVM Calculation,

FV = [PV = 0, PMT = 9,000, N = 7, I = 0.13]

FV = $93,641.92

One can afford it at the end of year 7

So, one can also afford it stcthe end of year

jeff jeffy answered 2 years ago

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