A3 Answer Savings Account PV Problem

# A3 Answer Savings Account PV Problem - the same value at...

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A3 Savings Account PV Problem Question: Your parents put \$50 at the end of each month in an account named for you, which they opened Sept 1, 1991. The annual interest rate on the account was 3.6% over the life of the account. (use end mode) A) What is the value of the account Sept 1, 2011? N= 20 * 12 = 240; pmt = 50; I = 3.6%; solve for FV=? \$17,537 B) What "lump-sum" would they have had to deposit when they opened the account for it to have
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Unformatted text preview: the same value at the end? Given (A) set pmt = 0 and then solve for PV? = \$8545.38 C) If they would have invested the amount found in part B in Google, which has grown at 18% per year, what would your wealth be at the end? (On this part set p/y to 1 to get a more accurate estimate of how the stock market value increases on an annual basis.) Given (B) change p/y = 1; keep pmt = 0; set i = 18%; Solve for FV? = \$234,083.90...
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