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Question 7 of 10 5Points Paul wants to buy a new car. Rather than take out a loan, he decides to save $200 a month in an acco

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Answer #1

200 per month is the earning

3% is the interest rate( monthly compounding)

3 years( time period)

if you starting saving now, the 200 will earn interest for entire 3 years(36 months), and the second 200 will earn interest only for 35 months etc...

total earning = 200*(1+3%/36)36+ 200*(1+3%/35)35+...................+200*(1+3%/1)1

= 7416 approximately

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