For both questions, please show what you typed into the TVM solver. N: I: PV: PMT: FV: Time of month: End or...

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Finance

For both questions, please show what you typed into the TVMsolver.
N:
I:
PV:
PMT:
FV:
Time of month: End or beginning
1. Rachel, who just turned 18, deposits a $15,000 gift into aninterest-bearing account earning a 7.5% annual rate of interest.How much will she have in the account when she retires at age 60,assuming all interest is reinvested at the 7.5% rate? If Racheldecided she only needed $300,000 at retirement, could she retire at59? Explain.
2. James deposited $800 at the end of the past 16 years topurchase his granddaughter, Kali, a car, James earned 8% interestcompounded annually on his investment. If the car Kali choosescosts $22,999, would she have enough money in the account topurchase the vehicle? What would be the deficit or surplus?

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4.3 Ratings (624 Votes)

Q1 Basically Rachel deposits 15000 so that is a cash outflowtherefore it should be input as a negative value in the PV Shedeposited it at the completion of 18 years of age and we need tocalculate the FV when she completed 60 years of ageN 6018 42I 75PV 15000PMT See Answer

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