You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How...

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You plan to buy your "dream car" when you graduate in 12 months. The cost of the car at that time will be $59,000 . How...

You plan to buy your "dream car" when you graduate in 12 months.
The cost of the car at that time will be $59,000 .
How much do you have to invest each month, starting next month, for 29 months to exactly pay for the car if your investments earn 5.00% APR (compounded monthly)?

Calculate your answer to the nearest dollar.

Write only the number with no dollar sign or comma (e.g., 3711)

business finance

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Answer 1

Answer #1

Ans 1918

P =	Periodic payments
r =	rate of interest
n =	no of years

Future Value of Annuity =	P ( (1 + r)ⁿ - 1 ) / r
59000 =	P* ((1 + 5%/12)^29 - 1) / (5%/12)
59000 =	30.7568586641773 * P
P =	59000 / 30.7568586641773
P =	1918

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Answer 2

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