Target is offering no payments for 3 years on the purchase of kitchen appliances. You decide to set yourself up with a new fridge, dishwasher, stove and microwave. Total cost for your new appliances is $6,250.00 (no interest cost is incurred during the three year promotion). Your fridge tells you should start a savings account to pay for the appliances in 3 years. The fridge tells you about a bank offering a savings account earning 6.75% APR, compounded monthly. How much money would you have to deposit now in the savings account earning 6 percent APR, compounded monthly, to pay the $6,250 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) (Hint: assume no monthly payments for this question.) How much would you need to deposit in the savings account each month to be able to pay the bill when the promotion ends in 3 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Target is offering no payments for 3 years on the purchase of kitchen appliances. You decide to set yourself up with a new fridge, dishwasher, stove and microwave. Total cost for your new appliances is $6,250.00 (no interest cost is incurred during the three year promotion). Your fridge tells you should start a savings account to pay for the appliances in 3 years. The fridge tells you about a bank offering a savings account earning 6.75% APR, compounded monthly.
How much money would you have to deposit now in the savings account earning 6 percent APR, compounded monthly, to pay the $6,250 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) (Hint: assume no monthly payments for this question.)
How much would you need to deposit in the savings account each month to be able to pay the bill when the promotion ends in 3 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
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