A man has purchased a new automobile. He wishes to set aside enough money in a bank account to pay the maintenance on the car for the first 5 years. It has been estimated that the maintenance is as follows For year- 1 the maintenance cost =$120, year- 2 the maintenance cost =$150, year- 3 the maintenance cost =$180, year- 4 the maintenance cost =$210, year- 5 the maintenance cost =$240. Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should the car owner deposit in the bank now?

A man has purchased a new automobile. He wishes to set aside enough money in a bank account to pay the maintenance on the car for the first 5 years. It has been estimated that the maintenance is as follows For year- 1 the maintenance cost =$120, year- 2 the maintenance cost =$150, year- 3 the maintenance cost =$180, year- 4 the maintenance cost =$210, year- 5 the maintenance cost =$240. Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should the car owner deposit in the bank now?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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