HELP!!! Financial Management Homework Problem...

[LukFilm]

Assume that you want to accumulate a sum of $20,000 to buy a new car in 3 years. If you plan on depositing equal monthly payments into your savings account (which pays 3% interest, compounded quarterly), how much must each payment be for your to reach your goal?

I tried and tried, but even after an hour, I can't figure it out... I know it's easy, but my brain fails me... Thanks for all the help.

 

[axelfox]

Damn, i thought i had it figured out, but i forgot.

and this is my major, how sad

 

[BrunoPuntzJones]

$531.62 here. sound close?

 

[Sluggo]

$532 a month @ 3% interest for 36 months will net you $20,015

cheat page

 

[LukFilm]

Thanks guys for the help

 

[LukFilm]

Another one:

Your child is going to start college in Fall 2011. The annual tuition TODAY is $25,000 and it is expected to grow by 3% annually until that year. You may assume that tuition will remain constant at the 2011 rate for the four years that your child attends. You expect to pay this constant tuition in Fall 2011, 2012, 2013 and 2014. Assume a rate of return of 8% a year.

a) You play to make 6 equal annual deposits starting today and running through Fall 2006 that will be sufficient to pay the expected tuition. How much should these deposits be?

b) After having made the first four deposits as planned, you learn that tuition will actually be $40,000 a year for the four years. Two more of the original planned deposits will not be enough to pay for the four years of tuition. Instead of the last two planned deposits, what amount should the last two deposits be such that the four $40,000 tuition bill are covered?

 

[Rage187]

That some hard stuff...


My major=pottery


my minor=Basket weaving

 

[sale1980]

WOW, good luck figuring it out...

 

[AaronP]

those are easy problems, if your gifted with a TI BAII Plus calculator. I would solve them, but my calc is upstairs and I'm downstairs. Sorry.

 

[Michael]

How about you do your own homework.

Most finance text books have present and future value tables that you should be using. You can also use Excel to solve these problems in minutes. They're trivial.

Michael

 

[LukFilm]

??? I'm just trying to get some help.

BTW, teacher helped me solve the first problem - FV=20,000, n=12, i=0.75, PMT=? which is $1,599.03 (quarterly) / 3 = $533.01.

ARGH! So easy after all...

 

[StageLeft]

First of all 3% sux!!

I made a quick program wherby I plug in payments, interest, starting cash, and it spits out the number of months until I'm paid off, but I have yet to jump start my brain into figuring out a simple equation (accurate one) that reverses this; ie how much money a month if I have 36 months and want to pay off $20k. Its much easier one way because you can compound the interst, but harder the other way. Of course I haven't really put much thought into it. Ah now i know.!

 

[BrunoPuntzJones]

<< ??? I'm just trying to get some help.

BTW, teacher helped me solve the first problem - FV=20,000, n=12, i=0.75, PMT=? which is $1,599.03 (quarterly) / 3 = $533.01.

ARGH! So easy after all... >>

w00t?