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How much should keith bowie deposit today in an account

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Question - Keith Bowie is trying to determine the amount to set aside so that he will have enough money on hand in 4 years to overhaul the engine on his vintage used car. While there is some uncertainty about the cost of engine overhauls in 4 years, by conducting some research online, Keith has developed the following estimates.

Engine Overhaul
Estimated Cash Outflow

Probability
Assessment

$210

10%

510

30%

770

50%

750

10%

How much should Keith Bowie deposit today in an account earning 8%, compounded annually, so that he will have enough money on hand in 4 years to pay for the overhaul?

Reference no: EM132059741

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