Question

You want to buy a Jeep on your 27th birthday. You have priced these cars and find that they currently sell for $105,000. You believe that the price will increase by 20% per year until you are ready to buy it. You can presently invest to earn 20%. If you have just turned 20 years old, how much must you invest per year to be able to purchase the Jeep in seven years? *

Answer 1

$271,234

Step-by-step explanation:

After every year, the last year's interest is added to the original cost, then you find the new 20% of that total. You do that for 7 years.