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I want to be able to buy a car with cash in 3 years. I have $10,000 that I can invest today. I can get a bond earning 2%. How much will I have for the purchase?

 Oct 29, 2022
 #1
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You will have 10,851.67 dollars.

 Oct 30, 2022
 #2
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FV = PV * [1  +  R]^N

FV = 10,000 * [1 + 0.02]^3

FV = 10,000 * 1.02^3

FV = 10,000 * 1.061208

FV =$ 10,612.08 - this is what you will have in 3 years at 2% compounded annually.

 

OR:

FV =10,000 * 0.02 * 3 years =$10,600 - this is what you will have in years at 2% SIMPLE interest.

 Oct 30, 2022

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