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18 November, 06:31

Barbara knows that she will need to buy a new car in 3 years. The car will cost $15,000 by then. How much should she invest now at 7%, compounded quarterly, so that she will have enough to buy a new car?

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  1. 18 November, 06:53
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    A=p (1+I/k) ^tk

    A future value 15000

    I interest rate 0.07

    K compounded quarterly 4

    T time 3

    p principle?

    15000=p (1+0.07/4) ^ (4*3)

    Solve for p

    P=15,000: (1+0.07:4) ^ (4*3)

    p=12,180.87
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