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A local furniture store is advertising a deal in which you buy a $4,700 living room...

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Finance

A local furniture store is advertising a deal in which you buy a$4,700 living room set with three years before you need to make anypayments (no interest cost is incurred).

How much money would you have to deposit now in a savingsaccount earning 6 percent APR, compounded monthly, to pay the$4,700 bill in three years?

How much would you have to deposit in the savings account eachmonth to be able to pay the bill?

Answer & Explanation Solved by verified expert
4.4 Ratings (565 Votes)
Payment to be made after 3 years 4700 APR 6Monthly rate APR No of months in a year 6 12 050Period 3 years 3 x 12 months 36    See Answer
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Transcribed Image Text

A local furniture store is advertising a deal in which you buy a$4,700 living room set with three years before you need to make anypayments (no interest cost is incurred).How much money would you have to deposit now in a savingsaccount earning 6 percent APR, compounded monthly, to pay the$4,700 bill in three years?How much would you have to deposit in the savings account eachmonth to be able to pay the bill?

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