7. Dave wants to take a year off work and has determined to accumulate enough savings to be able to withdraw $1500/month during that year. He has 4 years to accomplish this goal and can earn 4 ¾% interest on his savings. How much does he need to deposit each month to achieve this goal?

8. What would your car payment be if you financed a car for $18,450 over 3 years at an interest rate of 5%? How would that payment change if you financed it over 5 years at a rate of 4%? Which is the better deal? Defend your answer.

Answer rating: 100% (QA)

To determine how much Dave needs to deposit each month to achieve his goal we can use the concept of present value of an ordinary annuity The formula ... View the full answer