ZuoTi.Pro
Question

Question 7 Jack wants to accumulate $11,000 for a motor-bike in 4 years’ time. To do...

Question 7

Jack wants to accumulate $11,000 for a motor-bike in 4 years’ time. To do this, he will make 16 level deposits (quarterly) with the first deposit today. If he earns 14.1% per annum compounding quarterly, what regular deposit will be needed? (round to nearest cent; don’t use $ sign or commas)

Select one:

a. $505.67

b. $523.49

c. $1070.22

d. $1956.17

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

Homework Answers

Answer #1

Quarterly interest rate = 14.1%/4 = 3.525%

Let quarterly deposits be x

Future value of annuity = (1+r)* Periodic amount*[{(1+r)^n -1}/r]

11000 = (1.03525)*x*[{(1.03525)^16 -1}/0.03525]

11000 = 21.75345388 x

X =$505.67

Hence, quarterly deposits required =$505.67

The answer is a.

0 0
Add a comment
Know the answer?
Add Answer to:
Question 7 Jack wants to accumulate $11,000 for a motor-bike in 4 years’ time. To do...
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

  • You are wishing to accumulate $9,000 for an expedition in 4 years’ time. To do this,...

    You are wishing to accumulate $9,000 for an expedition in 4 years’ time. To do this, you will make 8 equal deposits (half yearly) with the first deposit today. If you earn 7.7% per annum compounding twice yearly, what deposit will be needed?

  • Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine...

    Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $65 per month into an account with an APR of 8%. Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice. (Round the final answer to the nearest...

  • Question Hep * Suppose someone wants to accumulate $T0,000 for a college fund over the next...

    Question Hep * Suppose someone wants to accumulate $T0,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal Assume the compounding and payment periods are the same The person deposits $150 per month into an account with an APR of 7% Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice the final answer to...

  • Consider the two savings plans below. Compare the balances in each plan after 6 years Which...

    Consider the two savings plans below. Compare the balances in each plan after 6 years Which person deposited more money in the plan? Which of the two investment strategies is better? Yolanda deposits $550 per month in an account with an APR of 3%, while Zach deposits $7000 at the end of each year in an account with an APR of 3.5% The balance in Yolanda's saving plan after 6 years was $ (Round the final answer to the nearest...

  • 1. You have $49,061.69 in a brokerage account, and you plan to deposit an additional $5,000...

    1. You have $49,061.69 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $200,000. You expect to earn 9.1% annually on the account. How many years will it take to reach your goal? Round your answer to the nearest whole number. 2. Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3...

  • 3. You want to buy a car, and a local bank will lend you $20,000. The...

    3. You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 3 years (36 months), and the nominal interest rate would be 12%, with interest paid monthly. What is the monthly loan payment? Round your answer to the nearest cent. $    What is the loan's EFF%? Round your answer to two decimal places.   % 4. Find the present values of the following cash flow streams. The appropriate interest rate...

  • 1. Shirley wants to go on a trip to Hawaii. She budgets that she can save...

    1. Shirley wants to go on a trip to Hawaii. She budgets that she can save $108 at the end of every month, and interest in her account is 8% compounded biweekly. By looking at prices, she knows that the trip will cost her $4813 total. How long in years (round to two decimal places) will it take before she can go on her trip? 2. Joey buys a new Honda civic for $18997. He agrees to payments at the...

  • A company wants to set up a sinking fund to accumulate funds needed in 5 years...

    A company wants to set up a sinking fund to accumulate funds needed in 5 years to purchase new equipment. The cost is estimated to be $400,000. The company decides to make​ end-of-quarter deposits into a fund earning 4% compounded quarterly. Prepare a sinking fund table for the first four payments. Complete the table for the first payment. Payment Number Amount of Deposit Interest Earned Total in Account $ (Round to the nearest cent as needed.) Period Interest Rate per...

  • Time Value of Money Spreadsheet Example 4 Module IV Name: Date: 6 7 8 Question 1 9 Question 2 10 Question 3 11 Question...

    Time Value of Money Spreadsheet Example 4 Module IV Name: Date: 6 7 8 Question 1 9 Question 2 10 Question 3 11 Question 4 12 Question 5 13 Question 6 14 Question 7 15 Question 8 16 Question 9 17 Question 10 18 19 20 Single Amount or Annuity 21 Periodic Interest Rate 22 Number of Periods 23 24 25 Present Value of Single Amount 26 27 Future Value of Single Amount 28 29 Future Value of An Annuity...

  • What is an annuity? Select one: a. present worth of a series of equal payments. b....

    What is an annuity? Select one: a. present worth of a series of equal payments. b. a single payment. c. a series of payments that changes by a constant amount from one period to the next. d. a series of equal payments over a sequence of equal periods. e. a series of payments that changes by the same proportion from one period to the next. Question 2 The present worth factor Select one: a. gives the future value equivalent to...

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