A home improvement firm has quoted a price of $9,800 to fix up Eric's backyard. Five years ago, Eric put $7,500 into a home improvement account that has earned an average of 5.25% per year
Does Eric have enough money in his account to pay for the backyard fix-up?
A) Yes; Eric now has exactly $9,800 in his home improvement account.
B) No; Eric has only $9,687 in his home improvement account.
C) Yes; Eric now has $10,519 in his home improvement account.
D) There is not enough information to answer this question.
Answer: B
Explanation: B) FV = PV ∗ (1 + r)n = $7,500 ∗ (1.0525)5 = $9,687
MODE = END
INPUT 5 5.25 -7,500 0 ?
KEY N I/Y PV PMT FV
CPT 9,687
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