Today's price of the car you want is $38,000, but in 5 years (with 2% annual...

 

Transcribed Image Text:

Today's price of the car you want is $38,000, but in 5 years (with 2% annual inflation) the cost will be (a) $_ Assume that in 5 years the trade-in value of your existing car will be $4,500. This means that you only need to save (b) $_ in the next 5 years Assuming that the rate of return is 9% on the money you are saving for your car, find the following: If you were to invest one lump sum now (that will grow to (b)) and interest is compounded annually, the lump sum you need to invest now is (c) $_ If you are going to set aside the same amount each month (that will grow to (b)) and interest is compounded monthly, your monthly payment needs to be (d) $_ Today's price of the car you want is $38,000, but in 5 years (with 2% annual inflation) the cost will be (a) $_ Assume that in 5 years the trade-in value of your existing car will be $4,500. This means that you only need to save (b) $_ in the next 5 years Assuming that the rate of return is 9% on the money you are saving for your car, find the following: If you were to invest one lump sum now (that will grow to (b)) and interest is compounded annually, the lump sum you need to invest now is (c) $_ If you are going to set aside the same amount each month (that will grow to (b)) and interest is compounded monthly, your monthly payment needs to be (d) $_