Question: Solve the following problem. Include all the procedure, diagram and the result. A person is interested in buying a car which is worth $P now,
Solve the following problem. Include all the procedure, diagram and the result.
A person is interested in buying a car which is worth $P now, but he can't buy it now. So he is going to start saving sufficient money in order to buy it in 3 years (36 month) from now. He will start saving $5,000 each month starting month 1 and will increment it $500 every month from month 2 until the end of year 2. Starting year 3 (month 25), he will start decrementing his monthly deposits by $100 each month until the end of year 3. The saving account has a monthly interest rate of 1%, while the car is increasing its value 10% each year. At the end of year 3, he will have saved enough money to buy the car (including the 10% inflation). what is the present value of the car ($P)?
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