GIVEN: One of your life goals is to circumnavigate the world on a year long trip...

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GIVEN: One of your life goals is to circumnavigate the world on a year long trip before your 30th birthday You have $4,000 in savings; but to enjoy the trip, you need $25,000 (food, lodging, excursions, travel) Research shows that cargo ship or oil tanker cruise (private ocean view cabin) is the most affordable mode of travel You decided to work 3 extra shifts/week at the local tavern in order to save an extra $5,000 per year Van City credit union is offering Term Deposits at 4% interest Required: a) Will you have enough money after 3 years? After 4 years? b) Assume a Round-the-World (RTW) plane ticket will cost you an extra $6,000 in travel costs, will you have enough after 5 years? Future Value at 4% (after 3 years): Future Value at 4% (after 4 years): Future Value at 4% (after 5 years): FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash Conclusion: FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash GIVEN: One of your life goals is to circumnavigate the world on a year long trip before your 30th birthday You have $4,000 in savings; but to enjoy the trip, you need $25,000 (food, lodging, excursions, travel) Research shows that cargo ship or oil tanker cruise (private ocean view cabin) is the most affordable mode of travel You decided to work 3 extra shifts/week at the local tavern in order to save an extra $5,000 per year Van City credit union is offering Term Deposits at 4% interest Required: a) Will you have enough money after 3 years? After 4 years? b) Assume a Round-the-World (RTW) plane ticket will cost you an extra $6,000 in travel costs, will you have enough after 5 years? Future Value at 4% (after 3 years): Future Value at 4% (after 4 years): Future Value at 4% (after 5 years): FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash Conclusion: FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash FV(a) FV(Is) Total FV of Cash Inflows @ 4% Total FV of Cash Outflow Net Cash

Answer rating: 100% (QA)

GivenInitial savings 4000Additional savings per year 5000Trip cost 25000Term Deposit interest rate 4 ... View the full answer