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    Future value

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    Three dealerships are wanting to merge as one company because of the tough times in the economy. They are thinking of relocating to either one of the cities, however they want to see what would be the best city to move to, based on the value of the land that each of the dealerships are on.

    Dealer One currently owes 820,000 over the next 6 years at 6%

    Dealer Two currently owes 450,000 over the next 8 years at 6%

    Dealer Three currently owes 675,000 over the next 10 years at 8%

    What is the best solution?

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    Solution Preview

    Hi, here is the solution...

    1) Dealer one future value = 820,000(1 + 0.06)^6
    = 820,000(1.06)^6

    Future value = 1163185.67 in 6 years

    Percentage of increase in the property value = 41.85%

    Average ...

    Solution Summary

    This provides an example of determining future value and comparing dealership worth.