A young graduate is planning on saving $849.00 each quarter for four years in an investment account paying 12.08% interest that is compounded quarterly. His first deposit will be made at the end of the next quarter, so this is a regular annuity. In 4 years, he also plans on being able to afford a 60-month car loan with $390.00 monthly payments at a 13.20% APR interest rate. Given the graduate’s plans, how expensive of a “dream car” will he expect to be able to purchase in four years?
A young graduate is planning on saving
$849.00 each quarter for four years in an investment account paying 12.08% interest that is compounded quarterly. His first deposit will be made at the end of the next quarter, so this is a regular annuity. In 4 years, he also plans on being able to afford a 60-month car loan with $390.00 monthly payments at a 13.20% APR interest rate. Given the graduate’s plans, how expensive of a “dream car” will he expect to be able to purchase in four years?
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