Examlex

Solved

Bill Wants to Buy a New Car in Three Years

question 62

Multiple Choice

Bill wants to buy a new car in three years from now. He expects that the price of a car will be $15 000 in three years. How much money should Bill put in his savings account now if a bank pays 5% interest rate on this account?


Definitions:

Compounded Semi-annually

A method where interest is calculated and added to the principal amount twice a year.

Quarterly

Happening quarterly or four times annually.

Trust Fund

A legal arrangement through which assets are held by a third party for the benefit of another party or parties.

Compounded Quarterly

The process in which interest is calculated and added to the principal amount every quarter of the year.

Related Questions