Use of Financial Calculator TI BA II Plus required. You are investing to achieve the following goals: A down payment for a cottage in the amount of $8000 in 6 years, $4000 for a trip to Europe in 3 years, and $150 000 to supplement retirement income in 24 years. If you can earn 7 percent compounded monthly on your investments, how much should you be saving each month?

Question

Quizplus · Accepted Answer

The correct answer is A. $392.To calculate the monthly savings required to achieve the financial goals, we can use the TI BA II Plus financial calculator.1. For the cottage down payment, we need to calculate the future value (FV) of $8,000 in 6 years at 7% compounded monthly.FV = 8000 * (1 + 0.07/12)^(12*6) = $10,285.722. For the trip to Europe, we need to calculate the FV of $4,000 in 3 years at 7% compounded monthly.FV = 4000 * (1 + 0.07/12)^(12*3) = $4,802.433. For the retirement income supplement, we need to calculate the FV of $150,000 in 24 years at 7% compounded monthly.FV = 150000 * (1 + 0.07/12)^(12*24) = $456,529.124. To calculate the monthly savings required, we can use the PMT function on the calculator.PMT = -(FV1 + FV2 + FV3) / ((1 - (1 + 0.07/12)^(-12*6)) / (0.07/12)) = -$392.01Therefore, the monthly savings required to achieve the financial goals is $392.

Use of Financial Calculator TI BA II Plus Required