Jenna would like to purchase a new car in three years.If she saves $1,000 per year in an account that pays 8% annual interest for the next 3 years,how much will she have saved for a down payment? (Round the final answer to the nearest dollar.) Values for i=8%,n=3
$$\begin{array} { | l | r | }
\hline \text { Present value of an ordinary annuity of } \$ 1 & 2.577 \
\hline \text { Present value of } \$ 1 \text { : } & .772 \
\hline \text { Future value of an ordinary annuity of } \$ 1 & 3.246 \
\hline \text { Future value of } \$ 1 : & 1.260 \
\hline
\end{array}$$
A) $3,246
B) $3,772
C) $3,577
D) $2,577

Question

Jenna would like to purchase a new car in three years.If she saves $1,000 per year in an account that pays 8% annual interest for the next 3 years,how much will she have saved for a down payment? (Round the final answer to the nearest dollar.) Values for i=8%,n=3
$$\begin{array} { | l | r | } 
\hline \text { Present value of an ordinary annuity of } \$ 1 & 2.577 \
\hline \text { Present value of } \$ 1 \text { : } & .772 \
\hline \text { Future value of an ordinary annuity of } \$ 1 & 3.246 \
\hline \text { Future value of } \$ 1 : & 1.260 \
\hline
\end{array}$$
A) $3,246
B) $3,772
C) $3,577
D) $2,577

Quizplus · Accepted Answer

The correct calculation involves the future value of an ordinary annuity formula, which is the appropriate method for calculating the amount Jenna will have after saving $1,000 annually at 8% interest for 3 years. The table provides the future value of an ordinary annuity of $1 as 3.246. Therefore, Jenna's savings will be $1,000 * 3.246 = $3,246 (rounded to the nearest dollar).

Jenna Would Like to Purchase a New Car in Three