Selma and Troy are planning to take a second honeymoon in 2 years. They estimate that...

 

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Selma and Troy are planning to take a second honeymoon in 2 years. They estimate that the cost will be roughly $7,985.74. They plan on making monthly payments of $275 and expect to receive 10% annual interest on their savings. Given this information: a. Would they be able to take the vacation (what is the exact amount over or under their goal)? b. What must the annual interest rate be in order to make their goal exactly? c. What must their monthly saving payment be in order to reach their goal if the annual interest rate drops 4.5% below the rate found in part b? Relevant Information Annual Interest Rate Periods Per Year Number of Years Needed Information Present Value Future Value Payment Rate Number of Periods Additional Calculations (if needed) Answer: a 10.000% 12 2 ($584.11) $7,985.74 ($275.00) 0.83% 24 b C PV FV PMT RATE NPER Selma and Troy are planning to take a second honeymoon in 2 years. They estimate that the cost will be roughly $7,985.74. They plan on making monthly payments of $275 and expect to receive 10% annual interest on their savings. Given this information: a. Would they be able to take the vacation (what is the exact amount over or under their goal)? b. What must the annual interest rate be in order to make their goal exactly? c. What must their monthly saving payment be in order to reach their goal if the annual interest rate drops 4.5% below the rate found in part b? Relevant Information Annual Interest Rate Periods Per Year Number of Years Needed Information Present Value Future Value Payment Rate Number of Periods Additional Calculations (if needed) Answer: a 10.000% 12 2 ($584.11) $7,985.74 ($275.00) 0.83% 24 b C PV FV PMT RATE NPER

Answer rating: 100% (QA)

a To determine if Selma and Troy will be able to take the vacation we need to calculate the future v... View the full answer