YOU CURRENTLY HAVE $10,000 IN THE BANK EARNING 0.50% PER MONTH. YOU...

8. You currently have $10,000 in the bank earning 0.50% per month. You need $35,000 to make a down payment on a house. You can save an additional $500 at the end of each month. How long will it take for you to accumulate the $35,000? A) Less than 1 year B) Between 1 and 2 years C) Between 2 and 3 years D) Between 3 and 4 years E) More than 4 years Solution D: Your savings goal is -35,000 = FV You currently have $10,000 in the bank = PV PMT = $500 and I/Y = 0.50% Comp “n” = 41.06 months or between 3 and 4 years.