It is estimated that the maintenance cost on a new car will be $350 the first...

 

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It is estimated that the maintenance cost on a new car will be $350 the first year. Each subsequent year this cost is expected to increase by $250. How much would you need to set aside when you buy a new car, to pay all future maintenance costs if you planned to keep the vehicle for 8 years? Assume interest rate is 6% per year. Use Arithmetic Gradient. a) Create the cash flow table for the 8 year period. b) Draw the associated cash flow diagrams for the problem c) Calculate the money you would need to set aside, to pay for future maintenance costs on a new vehicle, you plan to keep for 8 years. (4 marks) Given P = A(P/A, i, n) + G (P/G, i, n) (3 marks) (3 marks) C It is estimated that the maintenance cost on a new car will be $350 the first year. Each subsequent year this cost is expected to increase by $250. How much would you need to set aside when you buy a new car, to pay all future maintenance costs if you planned to keep the vehicle for 8 years? Assume interest rate is 6% per year. Use Arithmetic Gradient. a) Create the cash flow table for the 8 year period. b) Draw the associated cash flow diagrams for the problem c) Calculate the money you would need to set aside, to pay for future maintenance costs on a new vehicle, you plan to keep for 8 years. (4 marks) Given P = A(P/A, i, n) + G (P/G, i, n) (3 marks) (3 marks) C

Answer rating: 100% (QA)

a Cash flow table for the 8year period Year Maintenance Cost 1 350 2 60... View the full answer