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pete air wants to buy a used jeep in 3 years. he estimates the jeep will cost 17,100
Pete Air wants to buy a used Jeep in 3 years. He estimates the Jeep will cost $17,100. Assume Pete invests $12,100 now at 6 %
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Answer #1

Amount invested = $12,100

Interest rate (i) = 6/2

= 3% semi annually

Timer period (n) = 3 x 2

= 6 semi annually periods

Future value = Amount invested x Future value factor ( i%, ,n)

= 12,100 x Future value factor (3%,6)

= 12,100 x 1.19405

= $14,448

Hence, maturity value of amount invested = $14,448

b.

Pete will not have enough money to buy the jeep at the end of 3 years.

Kindly comment if you need further assistance. Thanks‼!

Note: Exact answer may slightly differ due to rounding off and factor value considered

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