Suppose That You Want to Save Up $3500 for a Semester

question 101

Short Answer

Suppose that you want to save up $3500 for a semester abroad two years from now. How much do you have to put away each month in a fund that earns 5% interest compounded monthly? Round to nearest cents.

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Definitions:

Allowance Method

An accounting technique used to account for bad debts by estimating and setting aside a portion of accounts receivable deemed unlikely to be collected.

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and writes off as bad debt expense.

Bankruptcy

A judicial process concerning an individual or entity that cannot fulfill their financial obligations.

Maturity Date

The final date by which a loan or other financial instrument must be paid back in full.