You are a college student and you plan to purchase a new car after you graduate...

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Finance

You are a college student and you plan to purchase a new carafter you graduate and begin your first job. You want to startsaving for a down payment now on a new car in the future . Youdecide to make monthly payment into a saving account, which earns2.5% annual interest compounded monthly. You will calculate amonthly payment into the saving account for each scenario.
A.To save $4,000 for 3 years.
B.To save $5,000 for 3 years.
C.To save $5,000 for 4 years.

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Formula for future value of annuity can be used to compute periodic payment as FV P x 1r n 1r P FV 1r n 1r FV Future Value P Periodic cash flow r Rate per period 25 pa or 002512 000208333333 See Answer

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You are a college student and you plan to purchase a new carafter you graduate and begin your first job. You want to startsaving for a down payment now on a new car in the future . Youdecide to make monthly payment into a saving account, which earns2.5% annual interest compounded monthly. You will calculate amonthly payment into the saving account for each scenario.A.To save $4,000 for 3 years.B.To save $5,000 for 3 years.C.To save $5,000 for 4 years.