Answer to Question #291615 in Economics for Cady Ismael Hadji

Question

A car is purchased on installment. The buyer makes a 200,000 down payment and owes a balance of 300,000 to be paid in 4 years. Find the car’s cash value if money is worth 7% compounded semiannually.

Answer 1

If the buyer makes a 200,000 down payment and owes a balance of 300,000 to be paid in 4 years, then the car’s cash value is 200,000 + 300,000 = 500,000.