1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Llana [10]
2 years ago
15

Reuben would like to buy a car that costs $25,000 today when he graduates from college in 5 years. If the rate of inflation is e

xpected to be 3% per year over the next 5 years, how much would Reuben expect to pay for a similar car in today's dollars
Business
1 answer:
Helga [31]2 years ago
5 0

The future value of the car that costs $25,000 today in 5 years at an inflation rate of 3% per year is <u>$28,981.85.</u>

<h3>What is the future value?</h3>

The future value shows the value that a present value will be in a future period, given the time value of money concept.

The future value can be computed using the future value formula, future value table, or an online finance calculator as below.

<h3>Data and Calculations:</h3>

Price of a car today = $25,000

Period to buy the car = 5 years

Inflation rate per year = 3%

Future value factor of 3% for 5 years = 1.159

Future price of the car in 5 years' time = $28,975 ($25,000 x 1.159)

N (# of periods) = 5 years

I/Y (Interest per year) = 3%

PV (Present Value) = $25,000

PMT (Periodic Payment) = $0

<u>Results:</u>

FV = $28,981.85

Total Interest $3,981.85

Thus, the future value of the car that costs $25,000 today in 5 years at an inflation rate of 3% per year is <u>$28,981.85.</u>

Learn more about future value computations at brainly.com/question/989421

You might be interested in
Describe a real or made up but realistic example of a situation in which a person’s awareness of their social class might have a
AnnyKZ [126]
A high school drop-out walks into a Coach store and sees how nice everyone there is dressed, where as she is wearing a crop top and ripped jeans with yellow mustard stains, she then feels uncomfortable and heads over to the restroom where she tries to hide the stains on her pants and tie her messy hair back
6 0
3 years ago
PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST)
Aliun [14]

To create market stability.

6 0
3 years ago
When financing a car, you must pay ___ on the amount borrowed.
goldfiish [28.3K]
The answer is interest. whenever you take a car loan from a bank or a financial institution, you always have to pay interest on the amount borrowed or the principal amount. the interest is how the financial institution or bank will earn through lending money
7 0
3 years ago
Effective corporate governance is essential in large corporations because corporate ownership (by shareholders) is separated fro
nalin [4]

Answer:

False

Explanation:

Outside directors are members of the board of directors that are not employees of the corporation. While an inside director is a member of the board that is also employed by the corporation, e.g. CEO.

Corporations are separate entities form their stockholders, that is why limited liability applies to them. The board of directors doesn't have to include stockholders or employees, they usually do, but it is not required by law. Outside directors should very experienced and capable individuals that possess certain expertise that can help the corporation. Also, the board should control and supervise upper management, but if only inside directors were admitted into it, then who would control them?

7 0
3 years ago
Read 2 more answers
In the local paper, a car dealership advertises a small used car for a great price and a low interest rate loan. When Patrice co
Shkiper50 [21]

Answer:

False advertising.

Explanation:

The car dealership is showing some advertising that caughts public atention because it offers lower rates and cheap prices for a product that it may not even exist. This is why is called false advertising, because at the time costumer arrives to the dealership asking for the car advertised, they try to sell a different product that is even more expensive.

5 0
3 years ago
Other questions:
  • The following information is available for the first year of operations of Engle Inc., a manufacturer of fabricating equipment:
    7·1 answer
  • Omega Co. has annual sales of $250,000, costs of goods sold of $168,000, and assets of $322,000. Accounts receivable are $86,200
    13·1 answer
  • Ziad Company had a beginning inventory on January 1 of 270 units of Product 4-18-15 at a cost of $19 per unit. During the year,
    12·1 answer
  • A private partnership whose shares are primarily offered to wealthy individuals and large institutions and which often makes hig
    12·1 answer
  • The human resource (HR) department of Wardund, an event management company, sent emails to all the employees of the firm, inviti
    14·1 answer
  • Given the market for illegal drugs, when thegovernment is successful in reducing the flow ofdrugs into the United States,
    8·1 answer
  • Monty loaned his friend Ned $20,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remain
    12·1 answer
  • Which of the following describes the stage in the economic cycle that follows growth?
    5·1 answer
  • A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On
    9·1 answer
  • In emerging industries _________. a. product-differentiation efforts are focused on product refinement as a basis of product dif
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!