Use Future Value And Present Value Tables To Apply Compound Interest To Accounting Transactions Tim wants to

Question:

Use Future Value And Present Value Tables To Apply Compound Interest To Accounting Transactions

Tim wants to save some money so that he can make a down payment of $3,000 on a car when he graduates from college in four years.

Required:

If he opens a savings account and earns 3 percent on his money, compounded annually, how much will he have to invest now?

Compound Interest
Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. Thought to have originated in 17th century Italy, compound... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...