5. (New Cashflow) How much money could you spend on yearly maintenance of a car

Question

5. (New Cashflow) How much money could you spend on yearly maintenance of a car if you deposited $6000 now at 5% and bought the car two years from now for $5000? You expect to have the car for 4 years after you buy it. ($454.58) How much money will you have after 10 years if you start by depositing $1500 in the bank (which has a current balance of $2100) at 6% interest and increase your deposit by $75 each year? ($27,510.03) 6. 7. At what yearly effective rate have you invested if you open a weekly CD that gives you 5.35% annually? How much money will you have if you deposit $1000 initially and leave the money in for a year? (5.49%, $1054.93)

Explanation / Answer

5.

money left after spending on car (after two years)

=6000*(1+5%)^2-5000

=1615

now we need to find annual costs that can be done on maintenance

=1615/((1-(1+5%)^(-4))/5%)

=455.45, so due to the decimal points different at intermediate stages, you can give the answer as 454.58

the above is answer..

we do only one question based on Chegg rule

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