Al derover wants to buy a used jeep in five years. he estimates the cost will be $12,000. if he invests $8,500 now at a rate of 10% compounded semiannually, will he have enough money to buy the jeep at the end of five years?

Yes he will have enough money to buy the jeep at the end of five years.

Step-by-step explanation:

Given: Al Derover invests $8,500 now at a rate of 10% compounded semiannually for five years.

Principal amount P= $8500

Rate of interest r =10% semiannually=

Number of periods n=

Now, the Compound amount (A) after n periods is given by:-

Clearly, $13845.60>$12,000

Hence, Yes he will have enough money to buy the jeep at the end of five years.

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