12. The time value of money Consider the following scenarios: Hardy Family The Hardys have saved $5,000 towards their goal to have $35,000 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 annual deposit should be, so they've asked you to calculate it. They have found a savings institution that will pay 8% interest. Colby Family The Colbys have set a goal to have $35,000 for a 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 $35,000 down-payment goal. They have found a savings institution that will pay 8% interest. Use the scenarios along with the following factor table data or the formulas to answer each of the questions. Future Value Factors Future Value Annuity Factors Future Value of an Annuity Formula Future Value of a Single Amount Formula Future Year 1 2 3 ue Factors: interest Rate 6% 5% 8% 1.050 1.060 1.080 1.102 1.120 1.166 1.158 1.190 1.260 Use the scenarios along with the following factor table data or the formulas to answer each of the questions. Future Value Factors Future Value Annuity Factors Future Value Factors: interest Rate Year 1 2 3 5% 6% 8% 1.050 1.060 1.080 1.102 1.120 1.166 1.158 1.190 1.260 Future Value of an Annuity Formula Future Value of a Single Amount Formula What is the amount of money the Hardys will need to deposit annually (rounded 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