Question

The Jones want to save $68,000.00 in 7 years for a down payment on a house....

The Jones want to save $68,000.00 in 7 years for a down payment on a house. If they make monthly deposits in an account paying 4% compounded monthly, what is the size of the payments that are required to meet their goal?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Amount that is to be saved after 7 years or Future value of all the monthly savings = $ 68,000

Time = 7 years

Rate = 4%

Let monthly savings be = R

Because payments are made monthly,

Number of times savings are made, n = 7*12 = 84

Effective rate, i = 4/12 = 0.34%

Using FVIFA formula,

FV =

Putting values in above formula,

68000 = R[(1+0.0034)^84-1]/0.0034

68000 = R (97.0340)

R = 68000/ 97.0340

R = 700.78

Size of monthly payments that are required to meen their goal is $ 700.78

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
the weidmans want to save $50,000 in 2 years for a down payment on a house....
the weidmans want to save $50,000 in 2 years for a down payment on a house. if they make monthly deposits in an account paying 12%, compounded monthly. what are the size of the payments that are required to meet thier goal? (round to the nearest cent)
You plan to buy a house in 7 years. You want to save money for a...
You plan to buy a house in 7 years. You want to save money for a down payment on the new house. You are able to place $353 every month at the end of the month into a savings account at an annual rate of 10.73 percent, compounded monthly. How much will be in the account after you made the last payment? Round the answer to the two decimal places.
In order to accumulate enough money for a down payment on a house, a couple deposits...
In order to accumulate enough money for a down payment on a house, a couple deposits $367 per month into an account paying 6% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 7 years? Amount in the account= How much interest earned=
if you want to save $50,000 in 5 years for a down payment on a house,...
if you want to save $50,000 in 5 years for a down payment on a house, how much do you need to save each month in order to accumulate this amount? Assume that you will earn 6% annual interest on your investment account.
You plan to buy a house in 11 years. You want to save money for a...
You plan to buy a house in 11 years. You want to save money for a down payment on the new house. You are able to place $286 every month at the end of the month into a savings account at an annual rate of 6.54 percent, compounded monthly. How much money will be in the account after you made the last payment?
Jenna wants $14,000 saved in 5 years to make a down payment on a house. How...
Jenna wants $14,000 saved in 5 years to make a down payment on a house. How much money should she invest now at 2.85% compounded quarterly in order to meet her goal? Jenna wants $14,000 saved in 5 years to make a down payment on a house. How much money should she invest now at 2.85% compounded quarterly in order to meet her goal?
You want to buy a house that costs $320,000. You will make a down payment equal...
You want to buy a house that costs $320,000. You will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an interest rate of 4.55 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments?
You want to buy a house that costs $255,000. You will make a down payment equal...
You want to buy a house that costs $255,000. You will make a down payment equal to 20 percent of the price of the house and finance the remainder with a loan that has an interest rate of 5.37 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments?
You plan to buy a house in 6 years. You want to save money for a...
You plan to buy a house in 6 years. You want to save money for a down payment on the new house. You are able to place $401 every month at the end of the month into a savings account at an annual rate of 14.64 percent, compounded monthly. How much money will be in the amount after you made the last payment?
you plan to buy a house in 13yearw you want to save money for a down...
you plan to buy a house in 13yearw you want to save money for a down payment on the new hiuse .you are able to place $394 every month into a savings account at an annual rate of 13.46 percent compounded monthly how muxh money will be in the account after you made the last payment
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT