You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly

Question

You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $15,800 at the end of each year for the next 9 years. You expect to earn 7 percent each year. (Use Table 3.)

Determine how much you will have saved after 9 years. (Round your intermediate calculations to 4 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)

Determine the amount saved if you were able to deposit $18,300 each year. (Round your intermediate calculations to 4 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)

Determine the amount saved if you deposit $15,800 each year, but with 10 percent interest. (Round your intermediate calculations to 4 decimal places and final answers to 2 decimal places.Omit the "$" sign in your response.)

Determine how much you will have saved after 9 years. (Round your intermediate calculations to 4 decimal places and final answers to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Requirement 1: FV of annuity = 15,800+15,800*1.07 + 15,800*1.07^2 + 15,800*1.07^3 + 15,800*1.07^4 + 15,800*1.07^5 + 15,800*1.07^6 +15,800*1.07^7 + 15,800*1.07^8 + =189252.22 Requirement 2: FV of annuity = 18,300 +18,300*1.07 + 18,300*1.07^2 + 18,300*1.07^3 + 18,300*1.07^4 + 18,300*1.07^5 + 18,300*1.07^6 +18,300*1.07^7 + 18,300*1.07^8 =219197.19 Requirement 3: FV of annuity = 15,800 + 15,800*1.1 + 15,800*1.1^2 + 15,800*1.1^3 + 15,800*1.1^4 + 15,800*1.1^5 + 15,800*1.1^6 +15,800*1.1^7 + 15,800*1.1^8 =214555.74

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