Question

new car costs $25,000 to build in 2020. The company’s analyst estimates the cost to build will rise 6% every year for the next 10 years. How much will the car cost in 2023?

Answer 1

$27,318.18

Explanation:

The build cost is multiplied by 1.03 each year. After 3 years, it will be multiplied by 1.03^3, so will be ...

$25,000×1.03^3 ≈ $27,318.18