# Accounting

posted by .

A woman would like to open a store in 8 years. She figures she will need 50,000 in capital to do so. She will make 10% on her money.

a. How much would she need to invest today in one lump sum to end up with 50000 in 8 years?

I got 23,325.25

b. if she's starting from scratch how much would she have to put away annually to accuulate the needed capital in 8 years?

I got 1247.82

c. how about if she already has 10,000 put away, how much would she have to put away to accumulate the needed capital in 8 years?

--This is the one I am stuck on. Also check my previous answers, they seem right but IDK. Thanks for any input!

• Accounting -

a. P = Po + Po*r*t.
Po + Po*0.10*8 = \$50,000.
Po + 0.8Po = 50,000.
1.8Po = 50,000.
Po = 50,000 / 1.8 = \$27,777.78.

• Accounting -

answer to c. If you expect to earn a 10.000% interest rate, compounded annually, you will need to deposit/invest \$18,660.30 now in order for your investment to grow to \$40,000.00 over the course of the next 8 years.

## Similar Questions

1. ### MATH

Please help check my answers to make sure they are correct. I used the "sinking fund payment and present value of an ordinary annuity" formulas to solve this story problem. Thanks! Story: Naomi Dexter is 20 years old. She decides to …
2. ### Math

Please help check my answers to make sure they are correct. I used the "sinking fund payment and present value of an ordinary annuity" formulas to solve this story problem. Thanks! Story: Naomi Dexter is 20 years old. She decides to …
3. ### Finance

Nancy Bellow promised her son she would pay him \$600 a quarterly for four years.If Nancy can invest her money in a 6% ordinary annuity, how much would she need to invest today
4. ### Math

Stacy requires \$3,000 in three years to make a down payment on a new car. She will receive 8% compounded annually for the three years. How much must she invest today to have the \$ 3,000 in three years?
5. ### MATH

Rico can invest money at 10%/a compounded quarterly. He would like \$15 000 in 10 years. How much does he need to invest now?
6. ### matttth help please

1. Mike wants to invest money every month for 40 years. He would like to have \$1 000 000 at the end of the 40 years. For each investment option, how much does he need to invest each month?
7. ### finance

Linda Scales is now employed as the managing editor of a well-known business journal. Although she thoroughly enjoys her job and the people she works with, what she would really like to do is open a bookstore of her own. She would …
8. ### Precalc

suppose you want to invest \$60,000 for ten years. You can invest your money in a CD that earns 4% interest, compounded quarterly and has no risk, or you can invest your money in futures that ear 10% interest, compounded quarterly. …
9. ### finance management

Wanda wants to open a health-food store. Her monthly expenses are rent \$3,500, utilities of \$1,000, insurance of \$500, and payroll of \$4,250. She estimates that her cost of goods is approximately 65 percent of sales. Wanda would like …
10. ### math

Annuities /assessment You would like to have \$550,000 when you retire in 35 years. You would like to have \$550,000 when you retire in 35 years. How much should you invest each quarter if you can earn a rate of 4.8% compounded quarterly?

More Similar Questions