As part of your financial planning, you wish to purchase a new car exactly 5 years from today. The car you wish to purchase costs $20,000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 5 years. Estimate how much you have to put on annual deposits at the end of each 5 following| years to fulfill your dreams about new car. You can deposit your money on deposits which give you 6% rate of return per year.

As part of your financial planning, you wish to purchase a new car exactly 5 years from today. The car you wish to purchase costs $20,000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 5 years. Estimate how much you have to put on annual deposits at the end of each 5 following| years to fulfill your dreams about new car. You can deposit your money on deposits which give you 6% rate of return per year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

See similar textbooks

Similar questions

If you are saving the same amount each month in order to buy a new sports car when the new models are released, which of the following will help you determine the savings needed? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You want to save money from your businessoperation to replace a truck that has been used indelivery. The truck will be replaced after 12 yearsfrom now and the replacement cost would be about$60,000. If you earn 5% interest on your savings,how much must you deposit at the end of each yearto meet the needs?
You are planning to buy a new car/truck (of your dreams) 7 years’ time at a cost of $134,956. How much will you need to save each month to be able to buy the car with cash assuming an annual interest rate of 10%?
You plan to buy property in Florida 8 years from today. To do this, you estimate that you will need $ 45000 at that time for the purchase. You would like to accumulate these funds by making equal annual deposits into your savings account, which pays 9% annually. If you make your first deposit at the end ofthis year, and you would like your accountto reach$ 45000 when the final deposit is made, what amount do you need to deposit annually?
You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $30,800 at the end of each year for the next 10 years. You expect to earn 7 percent each year. Required: 1. Determine how much you will have saved after 10 years. 2. Determine the amount saved if you were able to deposit $33,300 each year. 3. Determine the amount saved if you deposit $30,800 each year, but with 11 percent interest.
You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $30,700 at the end of each year for the next 10 years. You expect to earn 10 percent each year. Required: 1. Determine how much you will have saved after 10 years. 2. Determine the amount saved if you were able to deposit $33,200 each year. 3. Determine the amount saved if you deposit $30,700 each year, but with 12 percent interest. (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine how much you will have saved after 10 years. Note: Round your final answer to the nearest whole dollar. Balance in the Savings Account $ 490,483
You want to have $35,000 in cash to buy a car 3 years from today. You expect to earn 3.6 percent, compounded annually, on your savings. How much do you need to deposit today if this is the only money you save for this purpose? Can the excel and calculator solution be provided?
Assume that you plan to buy a condo 5 years from now and you need to save for a down payment. You plan to save 2, 500 per year (with the first deposit made immediately), and you will deposit the funds in a bank account that pays 4% interest. How much will you have after 5 years? How much will you have if you make the deposits at the end of each year?
Suppose that you are saving for college for a child. That child was just born and you will have to make 4 equal tuition payments over a four year period with the first occurring in exactly 18 years. Each successive tuition payment is made exactly a year after the prior payment. You also plan on buying this child a car in exactly 15 years using this same savings. You will pay $30,000 at that time for the car. You will be depositing money every year with the first check deposited into savings today and the last one the day the first tuition check is due. If you want to be able to pay $65,000 each year for tuition, how much do you have to save per year? Assume the discount rate is 10 percent per year.
You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $36,000 at the end of each year for the next 8 years. You expect to earn 12 percent each year. Required: 1. Determine how much you will have saved after 8 years. 2. Determine the amount saved if you were able to deposit $38,000 each year. 3. Determine the amount saved if you deposit $36.000 each year, but with 14 percent interest. Complete this question by entering your answers in the tabs below. Required 1 Required 21 Required 3 Determine how much you will have saved after 8 years. Note: Round your final answer to the nearest whole dollar. Balance in the Savings Account. Required 2 >
Your parents say they will loan you $15,000 today for college. They would like to be repaid $21,000 at the end of 10 years. What is the annual yield they will receive?