Colin has inherited $6,000 from the death of Grandma Anna. He would like to use this money to buy his mom Hayley a new scooter costing $7,000, two years from now
Will Colin have enough money to buy the gift if he deposits his money in an account paying 8 percent compounded semiannually?
n = 2, m = 2, r = 8%
FV = 6,000(1+.08/2)2 × 2 =6000(1.04)4= $7,019
Yes, Colin will have enough money to buy the scooter.
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