ZuoTi.Pro
Question

Joe is a 10 year old computer hobbyist, he has a paper route that nets him...

Joe is a 10 year old computer hobbyist, he has a paper route that nets him $135 each month in profit and wants to start saving to buy a computer. Assume he can find a bank that pays 0.75% interest monthly, he will deposit the entire $135 at the end of each month, and wants to buy a computer at the end of one year. Draw the cash flow diagram for this situation.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Amount at the end of a year = Future Value of annuity = A* ((1+rate)^n-1)/rate

= 135*((1+0.75%)^12-1)/0.75%

= 1688.52

Diagram

1688.52 Month 1 2 3 4 5 6 7 8 9 10 11 11 135 135 135 135 135 135 135 135 135 135 135 135

0 0
Add a comment
Know the answer?
Add Answer to:
Joe is a 10 year old computer hobbyist, he has a paper route that nets him...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. Calculate the accumulated value of an ordinary annuity of $4,200 a year for 6 years...

    1. Calculate the accumulated value of an ordinary annuity of $4,200 a year for 6 years if the money is worth 71 2 %. 2. Find the future value of the cash flow of $600 a month for 5 years at 9% interest compounded monthly. 3. If Gabe makes a $450 deposit into his savings fund at the end of each quarter for 6 years, how much will he be able to collect at the end of the sixth year...

  • Section 1: Short case studies (2marks each, total 10 marks) 1. Salman has only AED 70,000...

    Section 1: Short case studies (2marks each, total 10 marks) 1. Salman has only AED 70,000 today but needs AED 150,000 to buy a new dream car. How long will he has to wait to buy the car if she can earn 13 percent compounded annually on her savings? 2. Ali wants to have AED 70,000,000 in cash to buy a furnished apartment 5 years from today in JLT. She expects to earn 11 percent per year, compounded semiannually, on...

  • Chemical engineering class Engineering Economics I’m not understanding how he got the 0.0811 rate! Can someone...

    Chemical engineering class Engineering Economics I’m not understanding how he got the 0.0811 rate! Can someone explain that step by step. (Pic attached) Question: Jim wants to save money at the end of each month to pay for some equipment of $1000 at the end of the year. If bank pays 6% interest, compounded monthly, how much does Jim have to deposit every month? Example 4-2 Uniform Series Compound Interest Formulas Jim wants to save money at the end of...

  • (a) David Broke has $10,000 to deposit in his bank, Bancordia; if the bank is willing...

    (a) David Broke has $10,000 to deposit in his bank, Bancordia; if the bank is willing to pay annual interest of 2%, how much money will David Broke have in 5 years? (b) Suppose the bank is willing to pay 1.5 % twice a year, how much money will David Broke have in 5 years? (c) Imagine that after 5 years David Broke wants to buy a house; the bank is willing to loan him $120,000, which is unrelated to...

  • Huey, Dewey and Louie are triplets.  They are 25 years old and are trying to set up...

    Huey, Dewey and Louie are triplets.  They are 25 years old and are trying to set up savings plans for themselves.  They plan to retire at age 65.  They each have different ideas.  All APR’s are 4%. Huey’s plan:  deposit $100 each month into the account and leave the money in the bank until he retires at age 65.   Dewey’s plan:  Dewey doesn’t want to be bothered with monthly payments like Huey. He wants to hang onto his money throughout the year, and then make just...

  • Alan has just started work and he has been wanting to buy a sleek power boat...

    Alan has just started work and he has been wanting to buy a sleek power boat for some time. Rather than purchase and finance now, he plans to save money to buy it. He plans to deposit a fixed amount every month into a bank account that pays 3% a year, compounded monthly. His first deposit will be made a month from now. How much must each deposit be, if he is going to buy the boat in 5 years...

  • 2) Felix’s Retirement Plan Felix just turned 40 years-old. Although he still has many years of...

    2) Felix’s Retirement Plan Felix just turned 40 years-old. Although he still has many years of work ahead of him, he feels that he has not been saving enough for his retirement and wants to remediate the issue. He makes an appointment with his banker who offers the following long-term investment scheme: Felix is to commit to invest $1,000 at the beginning of each month for the next 20 years. These funds are to be invested 50% in bonds and...

  • a. Given: Mr. Uga has $100 million to invest. He wants his investment to triple in...

    a. Given: Mr. Uga has $100 million to invest. He wants his investment to triple in 6 years. A bank offers him an attractive rate of return that is compounded monthly. Solve for: What interest rate per month should the bank pay Mr. Uga in order for his investment to triple in 6 years? b. Given: Mr. Buga would like to invest a lump sum of money today in order withdraw $10,00 five years from today, $10,000 ten years from...

  • Joe Withers, a 38 year old male, is just about to complete his shift after working...

    Joe Withers, a 38 year old male, is just about to complete his shift after working a busy shift as a restaurant manager in one of the city' busiest restaurants. As he completing his paperwork, he feels a a pounding headache coming on and feels nauseous. Completed with his duties, he clocks out and gets in his car to drive home. He feels sweaty and weak and can't concentrate enough to start the car. A coworker, on his way out...

  • Anthony invested a sum of money 4 yr ago in a savings account that has since paid interest at the rate of

     9. Anthony invested a sum of money 4 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth $22,438.81. How much did he originally invest? Please round the answer to the nearest cent. 10. Joe plans to deposit $300 at the end of each month into a bank account for a period of 2 yr, after which he plans to deposit S500 at the end of each month into the same...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT