Question: A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $1500 in the first year, $2900

A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $1500 in the first year, $2900 in the second, and $2600 in the third year. After three years, the tractor is useless. If purchased, it is purchased today, while the above cost savings will be realized at the end of each year. If the interest rate is 3%, what is the most the farmer should ever pay for the tractor? (Calculate the savings at the end of each year.)

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