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Solve the problem. Round to the nearest cent.


Mark knows that he will need to buy a new car in 5 years. The car will cost $15,000 by then. How much should he invest now at 8%, compounded quarterly, so that he will have enough to buy a new car?

A$9452.54
C$12,328.91
B$11,025.45
D$10,094.57

Verified Answer :

Answer:

He invest $10101.01.

Step-by-step explanation:

Given : Mark knows that he will need to buy a new car in 5 years. The car will cost $15,000 by then.

To find : How much should he invest now at 8%, compounded quarterly, so that he will have enough to buy a new car?

Solution :

Using compound interest formula,

\(A=P(1+r)^t\)

Where, A is the amount  A=$15000

P is the principle P=?  

r is the rate r=8%=0.08

t is the time t= 5 years

Substitute the value,

\(A=P(1+r)^t\)

\(15000=P(1+\frac{0.08}{4})^{5\times4}\)

\(15000=P(1+0.02)^{20}\)

\(15000=P(1.02)^{20}\)

\(15000=P\times 1.485\)

\(P=\frac{15000}{1.485}\)

\(P=10101.01\)

Therefore, He invest $10101.01.

Answer:

d

Step-by-step explanation:

x - initial investment

8% - annual rate


x·=15,000,


so x = 10094.54    


ANSWER: $10,094.57

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