You want to have $45,000 in cash to buy a car 4 years from today. you expect to earn 4.5 percent, compounded annually, on your s

Question

Mashutka [201]

3 years ago

14

You want to have $45,000 in cash to buy a car 4 years from today. you expect to earn 4.5 percent, compounded annually, on your s

avings. how much do you need to deposit today if this is the only money you save for this purpose?

Mathematics

1 answer:

Strike441 [17] · Answer 1 · 2022-03-31T22:06:13+03:00

Strike441 [17]3 years ago

6 0

The formula is
A=p (1+r)^t
A future value 45000
P present value?
R interest rate 0.045
T time 4years

We need to solve for p
P=A÷(1+r)^t
P=45,000÷(1+0.045)^(4)
P=37,735.26