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How much must be deposited today in an account eaming 6% annually to accumulate a 20% down payment to use in purchasing a car one

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How much must be deposited today in an account eaming 6% annually to accumulate a 20% down payment to use in purchasing a car one year from now, assuming that the car's current price is $20,000 and the price will rise by 4% next year due to inflation? Hint: The car's price will be 4% higher next year due to inflation, so car's price in one year will be = 20000 x 1.04. O $3,774 O $3,782 $3,925 $4,080 Store ABC is offering free credit on purchases of over $1,000. You observe that a television can be purchased for nothing down and $4,000 due in one year Store XYZ offers an identical television for $3,650 but does not offer free credit. Which statement below best describes the real cost of "free" credit? Hint: Find the implied interest rate (like CAGR) assuming PV = price at Store XYZ and FV - price at Store ABC The "free" credit costs about 8.75% The "free" credit costs about 9.13% The "free" credit costs about 9.59% The "free" credit effectively costs zero percent

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