Question

Quantitative Problem 1. You dost 2.500 per year s to withdraw this amount the end of 5 years to use for a down payment on a new car. How much will you be able to withdraw at the end of years? Do not round intermediate calculations. Round your answer to the nearestent Quantitative Problem 2. Today, you velmum amount innegut fund that provides an annual return you would ike to have $11,500 in 6 years to help with a down payment for home. How much do you need to deportday to reach you . Do not found intermediate calculations. Round your answer to the nearest cent

Answer 1

Compute the future value after 5 years using the equation as shown below:

Future value = Deposit amount * ( 1 + Interest rate ) ^Period

                     = $2,300 * ( 1 + 4%) ⁵

                     = $2,300 * 1.2166529024000001

                     = $2,798.3

Hence, the amount which can be withdrawn after 5 years is $2,798.3