Suppose James wants to buy a car in 3 years’ time and estimates that he will need $25,000. The interest rate that he can earn from a savings account is 6% per annum. If James can put in $7,000 today, $6,000 in one year’s time and $5,000 in 2 years’ time, how much will he have to come up with at the end of the third year to buy his car?
A. |
He does not require more money as the total amount earned from the savings account at the end of 3 years will be enough. |
|
B. |
$20,378.71. |
|
C. |
None of the above. Not enough information has been provided. |
|
D. |
$4,621.29. |
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