Question

1. You opened a savings yesterday by depositing $10,000. You then continued to make deposits of $4,000 a year. You plan on taking a vacation once the account reaches a balance of $100,000. How many deposits will you need to make if the account is expected to earn 4% per year? (HARD)

2.You opened a savings yesterday by depositing $10,000. You would like to be able to withdraw $2,000 per year for each of the next 4 years of college and still have $3,000 left in the account when you graduate. What interest rate does this account need to earn? (HARD)

3. You just purchased a $30,000 car by taking out a $25,000 loan. If the loan requires 6 yearly payments with an annual interest rate of 5%, how much will each payment be?

Answer 1

1)

Hence, 15.24 deposits have to made to reach $100,000