Suppose Abigail wants to buy a Porsche 911 Turbo, which currently costs $125,000, in 6 years. The price of the Porsche is expected to increase at 2% per year for the next 6 years. 5. If she wants to make equal annual deposits at the end of each of the next 6 years, how much must she deposit each year if the interest rate is 6% in order to have the necessary funds to purchase the car

$20,181.21

Explanation:

First find the value of the Porsche at the end of 6 years:

= Current price * ( 1 + growth rate) ^ number of years

= 125,000 * (1 + 2%) ⁶

= $140,770

Abigail needs to have $140,770 at the end of 6 years. She would need to deposit a certain amount every year to get to that amount. This amount would be an annuity because it is constant.

Future value of annuity = Annuity * Future value interest factor of annuity, 6 years, 6%

140,770 = Annuity * 6.9753

Annuity = 140,770 / 6.9753

= $20,181.21

answer; ///i believe the best answer from the above question is (c) a method of making a purchase by trading items instead of using money; plz check first.good luck