Normal TNSpac...-Heading 1 Heading 2 Title Subt Styles Since attending college a
ID: 2817514 • Letter: N
Question
Normal TNSpac...-Heading 1 Heading 2 Title Subt Styles Since attending college at SAU and taking the Personal and has accumulated $20,000 in savings and investments, Jodie wants to open up her own more years. She thinks she will need $35,000 to do so. Finance course, Jodie has been saving regularly business in 3 1. Based on the above information, if Jodie can earn 8% on her money, how much will her $20,000 be worth in 3 years? ill he have met her $35,000 goal or will sh need more money, and if so, how more? 2. What if Jodie can earn 10% on her money? will she meet her goal in three years?Explanation / Answer
a)
Future value of the savings in 3 years
Present value , PV = 20000
Inteest rate , r = 8%
No of years , n = 3
Future Value = PV (1+r)n
= 20000 * (1.08)3
= 25194.24
She needs more money
Additional amount needed = 35000- 25194.24
= 9805.76
b)
new r = 10%
Future value of savings = 20000(1+0.10)3
= 26620
Still she cant meet her 35000 goal
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