You currently have $4000 saved towards the purchase of a new car. You want to be able to buy a car for $15000 in 4 years. Your money is earning 5% compounded yearly. What is the size of your yearly deposit? Select one: A. $2552.13 B. $2000.99 C. $2352.13 D. $928.05 E. $2320.12
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Using the formula for compound interest, the future value (FV) can be calculated as: FV = PV * (1 + r)^n Where: PV = Present value (initial amount saved) = $4000 r = Interest rate = 5% = 0.05 n = Number of years = 4 Plugging in the values, we get: FV = $4000 Show more…
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