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Time Value of money

2) Your parents will help pay for a car you will buy in 3 years. You have $7000 now and can earn 6% APR compounded monthly during the first year, and 7.5% APR compounded semi-annually during the second and third years. If your parents give you one-third of the price of the car, what is the most you can spend on the new car?

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2) Your parents will help pay for a car you will buy in 3 years. You have $7000 now and can earn 6% APR compounded monthly during the first year, and 7.5% APR compounded semi-annually during the second and third years. If your parents give you one-third of the price of the car, what is the most you can spend on the new car?

FVIF= Future Value Interest Factor
It can be read from tables or calculated using the ...

Solution Summary

Calculates future value.

$2.19