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answer questions A and B please a. b. You are shopping for a car and read the following advertisement in the newspaper: Own a new
answer questions A and B please
a.
b.
You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $13,000." You have shopped around and know that you can buy a Spitfire for cash for $39,000. What is the interest rate the dealer is advertising (what is the rate that equates the PV of the payments to today's cash price of the car)? Assume that you must make the annual payments at the end of each year. You graduate and receive a $11,000 cheque from your grandparents. You decide to save it toward a down payment on a house. You invest it earning 8% per year, and you think you will need to have $22,000 saved for the down payment. How long will it be before the $11,000 has grown to $22,000 ? To double the money you received from your grandparents, it will take years. (Round to one decimal place.)
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