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
