Professor G needs $35,000 to buy a car in 5 years. He earns 2.6% on his...

Question

Question

Professor G needs $35,000 to buy a car in 5 years. He earns 2.6% on his money. How much must he invest now to accomplish his goal?

business accounting

Answer 1

Answer #1

Solution:

Amount to be invested today to reach the goal = $35,000 / (1+0.026)^5

= $35,000 / 1.136938 = $30,784

Answer 2

Similar Homework Help Questions

Professor G wants to have $700,000 in his retirement account when he retires in 10 years....

Professor G wants to have $700,000 in his retirement account when he retires in 10 years. He earns 3.6% on his investments guaranteed. How much must he invest at the beginning of each month if he now already has $240,000 already saved up?
John is planning to buy a house in three years. He thinks he needs to put...

John is planning to buy a house in three years. He thinks he needs to put down $55,000 in three years as a down payment. Currently John has $15,000. He would like to start saving in a bank that offers 8% annual interest rate. How much should John save every month into that bank account so that he can accomplish his goal?
(1 point) John wants to buy a new sports car, and he estimates that he'll need...

(1 point) John wants to buy a new sports car, and he estimates that he'll need to make a $2,625.00 down payment towards his purchase. If he has 16 months to save up for the new car, how much should he deposit into his account if the account earns 2.981% compounded continuously so that he may reach his goal? John needs to deposit (Note: Your answer should have a dollar sign and be accurate to two decimal places)

(1 point) John wants to buy a new sports car, and he estimates that he'l need...

(1 point) John wants to buy a new sports car, and he estimates that he'l need to make a $3,300.00 down payment towards his purchase. If he has 27 months to save up for the new car, how much should he deposit into his account if the account earns 2.796% compounded continuously so that he may reach his goal? John needs to deposit (Note: Your answer should have a dollar sign and be accurate to two decimal places)
Derek borrows $30,145.00 to buy a car. He will make monthly payments for 6 years. The...

Derek borrows $30,145.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 6.31%. After a 11.00 months Derek decides to pay off his car loan. How much must he give the bank? Suppose you deposit $1,572.00 into an account today that earns 14.00%. It will take ___ years for the account to be worth $2,759.00. Assume the nominal rate of return is 6.64% and the real rate is 3.73%....
Jackie Rich would like to buy a $26,000 Toyota hybrid car in 5 years. Jackie wants...

Jackie Rich would like to buy a $26,000 Toyota hybrid car in 5 years. Jackie wants to put the money aside now. Jackie’s bank offers 10% interest compounded semiannually. How much must Jackie invest today? (Do not round intermediate calculations. Round your answer to the nearest cent.)

A recent college graduate has been saving money for the past 5 years to buy his...

A recent college graduate has been saving money for the past 5 years to buy his dream car. He has deposited $4,200 at the end of each year and is making the last deposit today, that is, he will have made a total of 5 deposits. How much money will he have saved for his dream car assuming he earned an annual return. of 8.10% on his investments? $30,889 $28,676 $19,809 $24,689
BE6-3 (L02) Candice Willis will invest $30,000 today. She needs $150,000 in 21 years. What annual...

BE6-3 (L02) Candice Willis will invest $30,000 today. She needs $150,000 in 21 years. What annual interest rate must she earn? BE6-6 (L03) Steve Madison needs $250,000 in 10 years. How much must he invest at the end of each year, at 5% interest, to meet his needs? BE6-7 (L02) John Fillmore’s lifelong dream is to own his own fishing boat to use in his retirement. John has recently come into an inheritance of $400,000. He estimates that the boat...
Derek borrows $35,692.00 to buy a car. He will make monthly payments for 6 years. The...

Derek borrows $35,692.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 5.45%. After a 13.00 months Derek decides to pay off his car loan. How much must he give the bank?

Derek borrows $32,107.00 to buy a car. He will make monthly payments for 6 years. The...

Derek borrows $32,107.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 6.26%. After a 13.00 months Derek decides to pay off his car loan. How much must he give the bank?