You plan to buy a new Mercedes four years from now.Today,a comparable car costs $82,500.You expect the price of the car to increase by an average of 4.8 percent per year over the next four years.How much will your dream car cost by the time you are ready to buy it?

Question

Quizplus · Accepted Answer

To calculate the future value of the car, we can use the formula:

FV = PV x (1 + r)^n

where FV is the future value, PV is the present value, r is the annual interest rate, and n is the number of years.

Plugging in the given values, we get:

FV = 82,500 x (1 + 0.048)^4
FV = 82,500 x 1.2155
FV = 99,517.41

Therefore, the answer is C: $99,517.41.

You Plan to Buy a New Mercedes Four Years from Now.Today,a