Arnold and Helene would like to visit Austria in four years to celebrate their 2

Question

Arnold and Helene would like to visit Austria in four years to celebrate their 25th wedding anniversary. Currently, the couple has saved $26,000, but they expect the trip to cost $30,000.

If they put $26,000 in an account that earns 8% interest, compounded annually, how much will they have in four years? (FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)

1b.

If they put $26,000 in an account that earns 8% interest, compounded annually, how much will they have in four years? (FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)

Explanation / Answer

1a. FV = PV (1+r)^n

FV = 26000 (1+0.08)^4

FV = S35372.71 approximately

If $26000 is deposited now in an account that earns 8% interest, compounded annually, in four years Arnold and Helene would have $35372.71 to their credit.

1b. In 2 years the value would be :

FV = 26000 (1+0.08)^2

FV = S30326.40 approximately

Ues, since the accumulated value would be greater than required amount of $30000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.