Josie wants to be able to celebrate her graduation from CSULA in 55 years. She found an annuity that is paying 2%. Her goal is to have $4,500.00. Assume the interest rate remains the same while the account is open. Round all answers to the nearest penny. How much should be deposited each week?
Josie wants to be able to celebrate her graduation from CSULA in 55 years. She found an annuity that is paying 2%. Her goal is to have $4,500.00. Assume the interest rate remains the same while the account is open. Round all answers to the nearest penny. How much should be deposited each week?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Josie wants to be able to celebrate her graduation from CSULA in 55 years. She found an annuity that is paying 2%. Her goal is to have $4,500.00. Assume the interest rate remains the same while the account is open. Round all answers to the nearest penny. How much should be deposited each week?
Expert Solution
Step 1
First let us understand the major points in the question briefly:
- Investment= P500,000 for Auto Wash Business in a city of 400,000 population.
- Equipment= Wash average 12 cars/hour + two men operates + small hand work.
- Hire= Two men to work 8 hour a day + 6 days/week + 50 week/year + 2 week vacation/year
- Employee hourly rate= P25.00/hour
- Income= P25.00/car wash + the owner is employed at a job that pays P25, 000/month
- Out-of-pocket miscellaneous costs= P8,500/month
- Write of investment within 5 years
- Capital of current business is 15%
- Rate of return investment should be 20%
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