For the question below, I'm having a hard time understanding the reason why we set it up like that (attachment) and if there is any way to do it on a finance calculator.

Cecilia wants to buy a new car in 5 years at which time she expects the car to cost $9,475. The rate of interest at her bank is expected to remain constant at 8% per year throughout the next five years. Her mom has promised to give her $2,500 in two years which she can put in the bank to help pay for the car. Assuming she saves the same amount from her salary each year how much does she have to save at the end of each year to have enough money in five years to buy the car?

Preview File View Go Tools Window Help 53% Sat 9:10 PM Ivette Rodriguez QEE . . . pdf-3.pdf (page 2 of 2) I v Q Q Q Search s.pdf https://www.coursehero.com/file/30743418/Practice-quiz-1-solutionspdf/ O L >> In order for Cecilia to have enough money to pay for her car, the present value of the You have 40 tutor questions Use them to ask a study question cost of the car must equal the present value of what her mom is going to give her plus the present value of her annual savings. This means: 9,475 2,500 1 (1+ 0.08)5 (1+0.08)? 0.08 0.08x (1+0.08) => S= 1,078 Therefore, Cecilia needs to save $1,078 each year for the next 5 years in order to meet her objectives. onstant at 8% per year ning she saves the same e was ero.c et