Show the calculations clearly to arrive at an answer for the following problems: a) The price of a car is $50,000 today.

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Show The Calculations Clearly To Arrive At An Answer For The Following Problems A The Price Of A Car Is 50 000 Today 1 (71.85 KiB) Viewed 15 times

Show the calculations clearly to arrive at an answer for the following problems: a) The price of a car is $50,000 today. Its price is expected to increase by $2,400 each year. You now have $25,000 in an investment that is earning 20% per year. The number of years before you have enough money to buy the car, without borrowing any money, is close to: 3 years (i) (ii) 5 years (iii) 7 years (iv) 9 years b) The market interest rate if is 12% per year, compounded semiannually. For an inflation rate of 2% per 6 months, the effective semiannual interest is closest to: (i) 2% (ii) 3% (iii) 4% (iv) 6%