After years of being a poor, debt-encumbered college student, you decide that you want to pay for your dream car in cash. Not having enough money now, you decide to specifically put money away each year in a “dream car” fund. The car you want to buy will cost $60,000 in eight years. You are going to put aside $6,000 each year (for eight years) to save for this. At what interest rate must you invest your money to achieve your goal of having enough to purchase the car after eight years?
After years of being a poor, debt-encumbered college student, you decide that you want to pay for your dream car in cash. Not having enough money now, you decide to specifically put money away each year in a “dream car” fund. The car you want to buy will cost $60,000 in eight years. You are going to put aside $6,000 each year (for eight years) to save for this. At what interest rate must you invest your money to achieve your goal of having enough to purchase the car after eight years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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After years of being a poor, debt-encumbered college student, you decide that you want to pay for your dream car in cash. Not having enough money now, you decide to specifically put money away each year in a “dream car” fund. The car you want to buy will cost $60,000 in eight years. You are going to put aside $6,000 each year (for eight years) to save for this. At what interest rate must you invest your money to achieve your goal of having enough to purchase the car after eight years?
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