Suppose you now spend $50 a month buying random stuff you don't need. So you decide to discipline yourself and save $50 a month. You have found an account that gives you 6% compounded monthly. You decide to make your monthly installment for the next 30 years.

Identify the following parameters.

Calculate how much money you will have in 30 years.

What if, instead, you decide to put $50 a month in a kitchen jar for the next 30 years? How much will you have then, assuming that your family won't take it away?

Over the 30 years, how much money are you going to earn as your interest? Use your two previous answers.

2. You want to have $10,000 as a down payment when you buy a new car in 4 years. If you can get 6% compounded monthly for 4 years, how much do you need to save every month?

Answer rating: 100% (QA)

Given the parameters for the car down payment scenario ... View the full answer