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Sagot :
The amount of money that you will have to save to buy a car at the $9,500 price is $556.11 ($9,500 - $8,943.89).
How is the amount of money needed determined?
The amount of money needed can be determined by calculating the future value of $7,500 invested at 4.5% for 4 years.
Then, the result, which is the future value, $8,943.89, is deducted from the $9,500 price, to determine the additional savings required.
The future value of an investment can be calculated using the future value formula, A = P (1 + i)^n.
Where:
A = future value
P = Present value of investment
i = interest rate
n = number of periods.
The future value can also be determined using an online finance calculator, as follows.
Data and Calculations:
N (# of periods) = 4 years
I/Y (Interest per year) = 4.5%
PV (Present Value) = $7,500
PMT (Periodic Payment) = $0
Results:
FV = $8,943.89
Total Interest = $1,443.89
Thus, the amount of money that you will have to save to buy a car at the $9,500 price is $556.11.
Learn more about future value calculations at https://brainly.com/question/24703884
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