How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JKCPA Your Own Question
JKCPA
JKCPA, CPA
Category: Finance
Satisfied Customers: 5883
Experience:  Bachelors degree and CPA with Accounting experience.
23848519
Type Your Finance Question Here...
JKCPA is online now
A new question is answered every 9 seconds

Gary Whitmore is a high school sophomore. He currently has

Resolved Question:

Gary Whitmore is a high school sophomore. He currently has $7,500 in a money market account paying 5.65 percent annually. He plans to use this and his savings over the next four years to buy a car at the end of his sophomore year in college. He estimates that the car will cost him $12,000 in four years. How much should he invest in the money market account every year for the next four years if he wants to achieve his target?
Submitted: 4 years ago.
Category: Finance
Expert:  JKCPA replied 4 years ago.
Hi,

Thanks for your question.

Please click here for the answer.

Hope this helps!
JKCPA and other Finance Specialists are ready to help you
Customer: replied 4 years ago.
What was the formula you used?
Expert:  JKCPA replied 4 years ago.
Hi,

Thanks for the accept.

The Excel formula is:
=PMT(RATE,NPER,PV,-FV)

where nper = number of periods (4)
rate = interest rate = 5.65%
PV = present value = $7500
FV = future value = $12000
PMT = what we're solving for (amount to be deposited each year)

Let me know if you meant that you need the mathematical formula to figure this out by hand (without Excel).




Customer: replied 4 years ago.
I'd like the marhmarical formula. Thanks
Expert:  JKCPA replied 4 years ago.

The math formula is:

Attachments are only available to registered users.

Register Here

Attachments are only available to registered users.

Register Here

Attachments are only available to registered users.

Register Here
View Full Image

Attachments are only available to registered users.

Register Here

Related Finance Questions