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BCOR 311 4. You want to have $25,000 in cash to buy a car 2 years from today. You expect to earn 8 percent compounded annuall
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Answer #1

Desired Sum = $25,000
Time Period = 2 years
Interest Rate = 8%

Amount Deposit = Desired Sum / (1 + Interest Rate)^Time Period
Amount Deposit = $25,000 / 1.08^2
Amount Deposit = $25,000 / 1.1664
Amount Deposit = $21,433.47

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