Web Application Chapter 9 page 373

The Hot Rod Shop uses Harley-Davidson FLSTF Fat Boy motorcycles. Every four years, The Shop purchases six new Fat Boys. How much will the Hot Rod Shop have to invest today in order to accumulate enough money to buy the new bikes in four years? The bank is currently paying 12% interest compounded quarterly. To get a price listing on the Fat Boy, go to www.harley-davidson.com. Select Product Index at the bottom of the Web page.

1. What is the current selling price of the Fat Boy, assuming bikes are purchased with no added luxuries?

2. Calculate total amount needed to purchase the six bikes in four years. Assume the selling price remains the same for four years.

3. Determine the rate per period, the number of periods, and use the table on page 372 of your textbook to find the appropriate factor.

4. Following Example 2 in Section 9.3 (page 373 of your textbook), calculate the present value needed to be invested.

Show your work and include the date of the information used in your answer.

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