You Are Saving for a Car That You Plan to Purchase

question 63

Multiple Choice

You are saving for a car that you plan to purchase in five years. You plan to put $3,000 in savings (which earns 8%, compounded annually) at the end of each year until then. How much will you have saved for the car at the end of the five years?

• A) $15,000
• B) $16,200
• C) $17,600
• D) $22,040

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Definitions:

Sealed-bid Auctions

Auctions in which all bidders simultaneously submit sealed bids to the auctioneer, with no bidder knowing the bid of any other participant.

Bid Rotation

A form of collusion in auction markets where participants take turns being the lowest bidder to ensure each wins a proportion of contracts over time.

Cartels

Organizations or associations of producers or suppliers formed to maintain prices at a high level and restrict competition.

Auctions

Competitive bidding processes where goods or services are sold to the highest bidder.