Question

you are saving for a porsche carrera cabriolet, which currently sells for nearly half a million dollars. your plan is to deposit $32,000 at the end of each year for the next 8 years. you expect to earn 13 percent each year. required: determine how much you will have saved after 8 years. determine the amount saved if you were able to deposit $37,000 each year. determine the amount saved if you deposit $32,000 each year, but with 15 percent interest.

Answer 1

The amount saved if you deposit $32,000 each year, but with 15 percent interest is $239,061.37 .

What is interest?

Interest is the amount that is paid by a borrower or deposit-taking financial institution to a lender or depositor in addition to the principle amount at a specified rate in the domains of finance and economics (the amount borrowed). It is not the same as any fees the borrower may be required to pay the lender or another party. It also differs from a dividend, which is cash distributed to shareholders (owners) by a company from its profit or reserve, but not at a set rate entirely determined in advance, but rather on a pro rata basis as a share of the generally greater by risk-taking businessmen when revenue is earned that exceeds all costs.

Total duration of the investment; N = 10

Recurring payment; PMT = -15,000

Interest rate ; I/Y = 10%

PV = 0

Then compute Future value, CPT FV = 239,061.369

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