Ask Question
25 April, 07:09

Joe wants to be able to purchase a dream car on January 1,2004, just after he graduates from college. Joe has had a part time job and started making deposits of $475 each month into an account that pays 18% compounded monthly beginning with the first deposit on February 1, 1999. The last deposit is to be made on January 1, 2004. Determine how much money he would have saved to buy the car.

+2
Answers (1)
  1. 25 April, 10:29
    0
    The money he would have saved to buy the car is $ 45701.96

    Explanation:

    Joe started making the deposits of $ 475 each month. This deposits pays 18% compounded interest monthly begining on february 1, 1999 with the first deposit ... Rememberd that the last deposit is to be made on january 1, 2004.

    The total number of periods then is 60 and the interest rate will be of 1,5%=18%/12.

    You will have to calculate the future value to know how much money he would have saved to buy the car.

    F = 475 (1+0,015) ∧60-1

    0,015

    F = 475 (1,015) ∧60-1

    0,015

    F = 475 (2.4432-1)

    0,015

    F = 475 * 1.4433

    0,015

    F = 475 (96.21)

    F = $45701.96
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Joe wants to be able to purchase a dream car on January 1,2004, just after he graduates from college. Joe has had a part time job and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers