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Depreciation of a Car

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You want to buy a certain car on your 25th birthday. The car sells currently for $25,000. You estimate that the price will increase by 10 percent per year until you are ready to buy. If you just turned 18 years old and can invest to earn 12 percent, how much must you invest at the end of each year to be able to purchase the car?

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Solution Summary

The expert examines depreciation of a car gift.