Ernest want to buy a car costing R120,000.He want to pay cash for this model of car can only do this in one and a half years time. If the inflation rate is running at 7% per annum,calculate the cost of this car in one and a half years time.
120000*(1.07)^1.5
SAVE R2000 CASH R9999 DEPOSIT R1000 TERM 24MONTHS MONTHLY INSTALMENT R484,96 ANNUAL INTEREST RATE 26% TOTAL REPAYABLE R13817,66 WHAT IS DEPOSIT IF YOU WISH TO TAKE OUT THE HIRE PUT CHADGE LOAN?
To calculate the cost of the car in one and a half years time, we need to take into account the inflation rate.
First, let's calculate the inflation factor using the formula:
Inflation factor = (1 + Inflation rate)
Inflation rate is given as 7% per annum, so the inflation factor will be:
Inflation factor = (1 + 0.07) = 1.07
Next, we need to calculate the future value of R120,000 after one and a half years.
Future value = Present value * Inflation factor
Future value = R120,000 * 1.07
Future value = R128,400
Therefore, the cost of the car in one and a half years time, taking into account the inflation rate of 7% per annum, will be R128,400.