Question

To join an upscale country club, an individual must first purchase a membership bond for $30,000. In addition, monthly membership dues are $250. Suppose an individual wants to put aside a lump sum of money now to pay for her basic country club membership expenses (including the $30,000 bond) over the next 30 years. She can earn an APR of 6%, compounded monthly, on her investments. What amount must this person now commit to the membership? Please only fill in the number of your calculated result in the blank, e.g., if the result is $100, fill in "100"; also round to the nearest integer.

Answer 1

Answer:

lump sum= 19,925

Explanation:

Giving the following information:

To join an upscale country club, an individual must first purchase a membership bond for $30,000. In addition, monthly membership dues are $250. Suppose an individual wants to put aside a lump sum of money now to pay for her basic country club membership expenses (including the $30,000 bond) over the next 30 years. She can earn an APR of 6%, compounded monthly, on her investments.

First, we need to calculate the total amount of money needed:

Final value= 30,000 + 250*12*30= 120,000

Now, we need to use the following formula:

PV= FV/(1+i)^n= 120,000/1.005^360= 19,925