12. The time value of money Consider the following scenanos: Hardy Family The Harays have saved $5,000 towards their goal to have $40,000 for a down payment on a house in 5 years. They will put the $5,000 in an account along with money they will deposit annually. They don't know how much that onnunt deposit should be so they ve asked you to calculate it They have found a savings institution that will pay 8% interest Liz Colby Family The Colbys have set a goal to have $40,000 for o down payment on a house in 5 years They have not saved anything so far They have asked you to calculate how much they will need to put away each year to achieve their $40,000 down payment goal They have found a savings institution that we pay interest Use the scenarios along with the following factor table data to answer each of the questions. Note that the complete Future Value and Future Value Annuity tables (as well as the Present Value and Present Value Annuity tables) are located in the appendix in your text. Table of Future Value Factors: Interest Rate Year 5% 6% 8% 1 1.050 1.060 1.000 2 1.120 1.166 1.102 1.158 3 1.260 4 1.216 1.360 5 1.469 1.276 1.340 1.190 1.260 1.340 1.420 1.500 1.790 6 1.582 1.851 iz!) 1.477 1.629 10 2.159 y Tools Tips Tips Table of Future Value Annuity Factors: Interest Rate Year 69% 8% 1 1.000 1.000 1.000 2 2.050 2.060 2.080 3 3152 3.180 3.246 4 4.310 4.380 4.500 5 5.526 5.630 5.867 6 102 6,970 7.336 9.549 9.300 10.637 10 12.578 13.10 14.487 U ss Self- the quiz!) What is the amount of money the Hardys will need to deposit annually crounded to the nearest two decimal places to achieve their down payment goal? What is the amount of money the Colbys will need to deposit annually (rounded to the nearest two decimal places) to achieve their down payment goal? Grade It Now Save & Continue