Question: Al Chico has just bought a caravan. However, he does not have enough money to pay now in one lump sum. The seller has decided

Al Chico has just bought a caravan. However, he does not

Al Chico has just bought a caravan. However, he does not have enough money to pay now in one lump sum. The seller has decided to arrange a yearly payment for Al Chico to follow as reflected in Table 1. Assuming the interest rate is at 8 percent, how much does Al Chico owe the owner if he were to pay cash now? (Please show the steps using the financial functions)

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LO2.3 Explain how the market system answers the five fundamental questions of what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote progress.

LO2.6 Explain how the market system deals with risk.

3. Why is private property, and the protection of property rights, so critical to the success of the market system? How do property rights encourage cooperation? LO2.2