Question
[The following information applies to the question displayed below.] Mary Kate, Ashley, Dakota, and Elle each want to buy a new home. Each needs to
[The following information applies to the question displayed below.] Mary Kate, Ashley, Dakota, and Elle each want to buy a new home. Each needs to save enough to make a 20% down payment. For example, to buy a $100,000 home, a person would need to save $20,000. At the end of each year for five years, the women make the following investments:
Person | Annuity Payment | Type of Account | Expected Annual Return | |||||
Mary Kate | $ | 2,500 | Savings | 3 | % | |||
Ashley | 3,500 | CDs | 5 | |||||
Dakota | 4,500 | Bonds | 6 | |||||
Elle | 4,500 | Stocks | 12 | |||||
Required:
1. Calculate how much each woman is expected to accumulate in the investment account by the end of the fifth year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)
Person | five-year Accumulated Investment |
Mary Kate | |
Ashley | |
Dakota | |
Elle |
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