17. Percival Planner wants to buy his daughter Priscilla a Mazda Miata for her 1
ID: 2686417 • Letter: 1
Question
17. Percival Planner wants to buy his daughter Priscilla a Mazda Miata for her 16th birthday. Today is Priscilla's 12th birthday, and starting on her next birthday, he wants to begin making annual deposits, so that with the final deposit on her 16th birthday, he will have the amount needed for the car. Mazda Miata's cost $16,000 today, and he anticipates that their price will increase 5% each year due to inflation. He can deposit his money in an account that pays 12% interest p.a. compounded quarterly each year. How much must each of his annual deposits be?Explanation / Answer
annual deposits= (16000*(1.05^4)/FVIFA(3,16))*4= 3858.75
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