Using the TVM calculator please answer the following Are these correct Replacing a Car in 5 Years Today's price of the car you want is $38,000 , but in 5 years (with 2 annual inflation) the cost will be (a) $41,955 07 Assume that in 5 years the trade invalue of your existing car will be $4,500 This meansthat you only need to save (b) $37,455 07 in the next 5 years Assuming that the rate of return is 9 on the money you are saving for your car, find the following If you were to invest one lump sum now (that will grow to (b) ) and interest is compounded annually , the lumpsum you need to invest now is (c) $3,370 96 If you are going to set aside the same amount eachmonth (that will grow to (b)) and interestis compounded monthly , your monthly payment needsto be (d) $25 28 Show all work process for full credit PV 38,000 PV 37,455 07 PMT 0 PMT 4,500 FV 41,955 07 FV 41,955 07 RATE 2 RATE 0 PERIOD 5 YEARS PERIOD 0 COMPOUNDING ANNUALY COMPOUNDING 0 PV 37,455 07 PV 3,370 96 PMT 3,370 96 PMT 25 28 FV 40,826 03 FV 37,455 07 RATE 9 RATE 9 PERIOD 5 YEARS PERIOD 5 YEARS COMPOUNDING ANNUALY COMPOUNDING MONTHLY Australian Vacation in 4 years Assume you need $22,500 for the Australian vacation you hope to go on in 4 years How much will you have to save annually , assuming you can invest at an 10 return (a) $ 2,250 What if you could find a 12 annual return rate How much would you need to save monthly (b) $ 2,700 ANNUAL $225 MONTHLY What is the difference in monthly (HINT Some conversion using the financial calculator is needed here for which value ) savings needed on the 10 vs the 12 (c) $225 FOR 12 ,$187 50 FOR 10 , it was needed for the 12 The difference in payment would be $37 50 Show all work process for full credit A)PV 22,500 B) PV 22,500 PMT 0 PMT 0 FV 2,250 FV 25,200 RATE 10 RATE 12 PERIOD 4 PERIOD 4 COMPOUNDING ANNUAL COMPOUNDING ANNUAL C) PV 22,500 D)PV 22,500 PMT 0 PMT 0 FV 22,687 50 FV 22,775 RATE 10 RATE 12 PERIOD 4 PERIOD 4 COMPOUNDING MONTHLY COMPOUNDING MONTHLY

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Using the TVM calculator please answer the following: Are these correct? Replacing a Car in 5 Years: Today's price of the car you want is

Using the TVM calculator please answer the following:

Are these correct?

Replacing a Car in 5 Years:

Today's price of the car you want is $38,000, but in 5 years (with 2% annualinflation) the cost will be (a) $41,955.07 . Assume that in 5 years the trade-invalue of your existing car will be $4,500. This meansthat you only need to save (b) $37,455.07 in the next 5 years

Assuming that the rate of return is 9% on the money you are saving for your car, find the following:

If you were to invest one lump sum now (that will grow to (b)) and interest is compounded annually, the lumpsum you need to invest now is (c) __$3,370.96____.
If you are going to set aside the same amount eachmonth (that will grow to (b)) and interestis compounded monthly, your monthly payment needsto be (d) $25.28 .

[Show all work/process for full credit]

PV	38,000	PV	37,455.07
PMT	0	PMT	4,500
FV	41,955.07	FV	41,955.07
RATE	2%	RATE	0
PERIOD	5 YEARS	PERIOD	0
COMPOUNDING	ANNUALY	COMPOUNDING	0

PV	37,455.07	PV	3,370.96
PMT	3,370.96	PMT	25.28
FV	40,826.03	FV	37,455.07
RATE	9%	RATE	9%
PERIOD	5 YEARS	PERIOD	5 YEARS
COMPOUNDING	ANNUALY	COMPOUNDING	MONTHLY

Australian Vacation in 4 years:

Assume you need $22,500 for the Australian vacation you hope to go on in 4 years. How much will you have to save annually, assuming you can invest at an 10% return?

(a) $_2,250____________.

What if you could find a 12% annual return rate? How much would you need to save monthly?

(b) $ 2,700 ANNUAL $225 MONTHLY

What is the difference in monthly (HINT: Some conversion using the financial calculator is needed here for which value??) savings needed on the 10% vs. the 12%? (c) $225 FOR 12%,$187.50 FOR 10%, it was needed for the 12% The difference in payment would be $37.50

[Show all work/process for full credit]

A)PV	22,500	B) PV	22,500
PMT	0	PMT	0
FV	2,250	FV	25,200
RATE	10	RATE	12
PERIOD	4	PERIOD	4
COMPOUNDING	ANNUAL	COMPOUNDING	ANNUAL

C) PV	22,500	D)PV	22,500
PMT	0	PMT	0
FV	22,687.50	FV	22,775
RATE	10	RATE	12
PERIOD	4	PERIOD	4
COMPOUNDING	MONTHLY	COMPOUNDING	MONTHLY