If you can earn 7.5 percent, compounded annually, on your savings, how much do you need to deposit today to reach your goal?

You want to have $50,000 for a down payment on a house 5 years from now. If you can earn 7.5 percent, compounded annually, on your savings, how much do you need to deposit today to reach your goal?

Group of answer choices

$35,133.35
$34,827.93
$34,677.70
$33,989.16
$32,886.33

Expert Solution

FV = 50000, n = 5 years, r = 7.5%

We have to find what amount should be deposied today = PV

PV = FV/(1+r)^n

PV = 50000/(1+0.075)^5 = 50000/1.43562933 = 34827.93

Answer : 34827.93

jeff jeffy answered 2 years ago

you deposit $500 today in a savings account that pays 6% interest, compounded annually. How much...

you deposit $500 today in a savings account that pays 6% interest, compounded annually. How much will your account be worth at the end of 40 years?

You deposit $1,000 in a saving account at 10% compounded annually. How much is your first...

You deposit $1,000 in a saving account at 10% compounded annually. How much is your first year interest? How much is your second year interest? 100, 100 100, 110 100, 120 100, 150

How much will be in an account at the end of 5 years if you deposit $10,000 today at 8.7% annual interest, compounded semi-annually?

Practice Time Value of Money Problems 1. How much will be in an account at the end of 5 years if you deposit $10,000 today at 8.7% annual interest, compounded semi-annually? 2. What is the balance at the end of 10 years if $2.500 is deposited today and the account earns 4% interest annually? What about if it's quarterly interest? Which one should be more and why? 3. Suppose you want to have $500,000 saved by the time you reach 30 years old....

You deposit $600 in an account earning 3% interest compounded annually. How much will you have...

You deposit $600 in an account earning 3% interest compounded annually. How much will you have in the account in 15 years?

How much additional income could he earn if he had invested this amount at 7 percent, compounded annually?

Today, Tony is investing $16,000 at 6.5 percent, compounded annually, for 4 years. How much additional income could he earn if he had invested this amount at 7 percent, compounded annually?Group of answer choices$323.22$389.28$401.16$442.79$484.08

You plan to make a deposit today to an account that pays 6% compounded annually that...

You plan to make a deposit today to an account that pays 6% compounded annually that will found the following withdrawals with nothing left in the account after the withdrawals, starting at the end of year 4 you plan to make 5 annual withdrawals (withdraw in year 4,5,6,7,8) that will increase by 2% over the previous year's withdrawals. The amount for withdrawals in year 4 will be $2000, what amount do you need to deposit today?

a. How much money (a single lump sum) do you need to deposit today (t=O) to...

a. How much money (a single lump sum) do you need to deposit today (t=O) to have $1,000,000 in 30 years if you earn a 5.5% rate of return compounded annually with no additional investment? What about a 9.5% rate of return compounded annually? How about 1.7%? b. If you purchase a new 2014 Ford for $30,000 today, what is your monthly payment if you borrow at a 6% nominal rate compounded monthly? Assume that you put 10% of the cost...

You deposit $3000 each year into an account earning 3% interest compounded annually. How much will...

You deposit $3000 each year into an account earning 3% interest compounded annually. How much will you have in the account in 25 years? $

Margaret Moore anticipates needing $460,000 to start a business. If she can earn 7.5 percent compounded...

Margaret Moore anticipates needing $460,000 to start a business. If she can earn 7.5 percent compounded annually on her investments, how much money would Margaret have to invest today to have $460,000 in 3 years? (Round answer to 0 decimal places, e.g. 5,713.)

1. You deposit $3000 each year into an account earning 7% interest compounded annually. How much...

1. You deposit $3000 each year into an account earning 7% interest compounded annually. How much will you have in the account in 25 years? 2. Suppose you want to have $600,000 for retirement in 25 years. Your account earns 7% interest. a) How much would you need to deposit in the account each month? b) How much interest will you earn? 3. You have $400,000 saved for retirement. Your account earns 7% interest. How much will you be able...

Question