You need $5,000 for a trip to Europe in two years. How much would you have to deposit monthly in a savings account paying 1 percent in order to meet your goal?

b. Investing $1,000 at 6 percent for five years, what is the difference in purchasing power of your savings if inflation increases by 2 percent annually during that time? By 4 percent?

c. Starting today, how much would you need to save each month in order to become a millionaire before you retire?

d. You need a new car. What car can you afford if you have $1,500 for a down payment, can make monthly payments of $300, and get $1,000 for trading in your old clunker?

e. How much house can you afford if you earn $36,000 a year and have $10,000 savings for a down payment, a $6,000 car loan balance, and no credit card debts?

Answer rating: 100% (QA)

a To calculate the monthly deposit required to reach a savings goal of 5000 in two years with a 1 interest rate we can use the future value of an ordi... View the full answer