It is likely that airplane tickets will increase 6% in each of the next 3 years. The cost of a plane ticket at the end of the first year will be 10952. How much money would need to be placed in a savings account now to have money to pay for a trip at the end of each year for the next 3 years? Assume the savings account pays 1% annual interest. Round your answer to 2 decimal places.

It is likely that airplane tickets will increase 6% in each of the next 3 years. The cost of a plane ticket at the end of the first year will be 10952. How much money would need to be placed in a savings account now to have money to pay for a trip at the end of each year for the next 3 years? Assume the savings account pays 1% annual interest. Round your answer to 2 decimal places.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter4: Managing Your Cash And Savings

Section: Chapter Questions

Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...

See similar textbooks

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
It is likely that airplane tickets will increase 5% in each of the next 5 years. The cost of a plane ticket at the end of the first year will be ₱10720. How much money would need to be placed in a savings account now to have money to pay for a trip at the end of each year for the next 5 years? Assume the savings account pays 2% annual interest.
You are forecasting the amount of plane tickets. Based on your study, it is likely that airplane tickets will increase 8% in each of the next four years. The cost of the plane ticket at the end of first year will be P2303. How much money would be placed in the savings account of the customers NOW to have money to pay a customer's travel home at the end of each year for the next four years? Assume that the savings account pays 5% annual interest. Show complete solution with cash flow diagram.
It is likely that plane tickets will increase 6.5% in each of the next three years. The cost of the plane ticket at the end of the first year will be $150. How much money would need to be placed in a savings account now to have money to pay a student's travel home at the end of each year for the next 3 years? Assume savings account pay 8% annual interest.
Your goal is to save up $30,000 to use as a future down payment. If you save $4,596 every year in an account that earns 3% annually, how long will you be saving? Round your numerical answer to the nearest one-hundredth of a year.
you want to have 25000.00 in your account in ten years to go on a dream trip to austrailia. what sum of money must you deposit at the end of every 3 months if your account earns interest at 6% compounded monthly?
Suppose that you want to save $14000 over the next 6 years and you know that your savings will earn 5.5% p.a. interest (calculated monthly). How much do you need to put into the savings account each month to achieve your goal? Give your answer to the nearest penny. Your Answer: