2. Andy is planning to buy a car when he graduates from college 4 years from now. The estimated value of the car is $25000. He will need to make a down-payment equal to 20% of the value of the car. He plans to raise the down-payment by making equal monthly deposits into a bank savings account that pays interest at the rate of 6% per year, so that he has the down-payment, four years from now. He wants you to help him Ögure out the minimum monthly deposit he will have to make for the next 4 years. (a) What is the monthly interest rate the bank pays? (b) At this moment you do not know the value of the monthly deposit he has to make. Let it be P dollars per month. Write down an expression for the total value of all the monthly payments he will deposit, (including interest), over the 4 year period. (c) The expression in part (b) should equal the down-payment he will need for the down-payment. Use that information to determine P . Show the work leading to your answer. Round o§ your answer to the nearest dolla
2. Andy is planning to buy a car when he graduates from college 4 years from now. The estimated value
of the car is $25000. He will need to make a down-payment equal to 20% of the value of the car. He
plans to raise the down-payment by making equal monthly deposits into a bank savings account that
pays interest at the rate of 6% per year, so that he has the down-payment, four years from now. He
wants you to help him Ögure out the minimum monthly deposit he will have to make for the next 4
years.
(a) What is the monthly interest rate the bank pays?
(b) At this moment you do not know the value of the monthly deposit he has to make. Let it be P
dollars per month. Write down an expression for the total value of all the monthly payments he
will deposit, (including interest), over the 4 year period.
(c) The expression in part (b) should equal the down-payment he will need for the down-payment.
Use that information to determine P . Show the work leading to your answer. Round o§ your
answer to the nearest dolla
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