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17 July, 06:04

One year ago, Deltona Motor Parts deposited $16,500 in an investment account for the purpose of buying new equipment three years from today. Today, it is adding another $12,000 to this account. The company plans on making a final deposit of $20,000 to the account one year from today. How much will be available when it is ready to buy the equipment, assuming the account pays 4.5 percent interest?

a. $53,408

b. $55,211

c. $55,997

d. $56,792

e. $57,232

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Answers (1)
  1. 17 July, 08:53
    0
    The correct answer is B.

    Explanation:

    Giving the following information:

    One year ago, Deltona Motor Parts deposited $16,500 in an investment account to buy new equipment three years from today. Today, it is adding another $12,000 to this account. The company plans on making a final deposit of $20,000 to the account one year from today.

    To calculate the future value of the investment, we need to use the following formula:

    FV = PV * (1+i) ^n

    First deposit = 16,500 * (1.045^4) = 19,676.56

    Second deposit = 12,000 * (1.045^3) = 13,694

    Third deposit = 20,000 * (1.045^2) = 21,840.5

    Total = $55,211.06
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