SOLUTION: Suzanne wants to buy a $1,125.00 stereo when she graduates from school. She is able to deposit $40 at the end of each month in an account that pays 6.5% compounded monthly. She wil

Question 1200738: Suzanne wants to buy a $1,125.00 stereo when she graduates from school. She is able to deposit $40 at the end of each month in an account that pays 6.5% compounded monthly. She will graduate in 2 ½ years.
a) How much money will she have saved?
b) Will she have enough to purchase her stereo including the sales tax of 15%?
Help, Please
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the calculator at can help you solve this.
here are the results from using that calculator.

you inputs are:
pv = 0
fv = 0
np = 2.5 year * 12 = 30 months
pmt = -40 (negative because it's what you spent)
ir = 6.5% per year / 12 = .541666666666666% per month
payment is at the end of each month.

calculator says that you will have 1,299.19 at the end of the 30 month investment period.
since the stereo is 1125, you'll have more than enough to buy it when you graduate.

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