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Betty will need $12,000 in five years to pay for a major overhaul on her tractor engine. She has found an investment that wil

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Answer #1

Ans. Investment needed by Betty today should have a future value of $12000 after 5 years at a rate of returm of 5%. Thus,

12000 = Investment * (1+0.05)^5

=> Investment = $9402.314

Thus, Betty needs to invest $9402.314 today so she will have her overhaul funds in five years.

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