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Andrew has purchased a new car. He want to set aside enough money in a bank account to pay the maintenance for the first three years. The maintenance cost of the car is:   Year 1:  $120         2:  $150         3:  $180 Assume that the maintenance costs occcur at the end of each year and that the bank pays 5% interest. How much should Andrew deposit in the bank now?   In order to solve this question, what information & formula would Andrew need?     n=5, i=7%, G=60 and ? = ?(? + ? ) �     A1=120, G=30, n=3, i=5% & ? = ? [ ?/ ? − (? / (?+?) ?−?) ]     A1=150, i=8%, G=50, n=4 & ? = ? [ (?+?) ?−? ?(?+?) ? ]     G=210, i=5%, n=3, & ? = ?[ (?+?) ?−? / ? ]

Andrew has purchased a new car. He want to set aside enough money in a bank account to pay the maintenance for the first three years. The maintenance cost of the car is:   Year 1:  $120         2:  $150         3:  $180 Assume that the maintenance costs occcur at the end of each year and that the bank pays 5% interest. How much should Andrew deposit in the bank now?   In order to solve this question, what information & formula would Andrew need?     n=5, i=7%, G=60 and ? = ?(? + ? ) �     A1=120, G=30, n=3, i=5% & ? = ? [ ?/ ? − (? / (?+?) ?−?) ]     A1=150, i=8%, G=50, n=4 & ? = ? [ (?+?) ?−? ?(?+?) ? ]     G=210, i=5%, n=3, & ? = ?[ (?+?) ?−? / ? ]

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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  1. Andrew has purchased a new car. He want to set aside enough money in a bank account to pay the maintenance for the first three years.

    The maintenance cost of the car is:

     

    Year 1:  $120

            2:  $150

            3:  $180

    Assume that the maintenance costs occcur at the end of each year and that the bank pays 5% interest. How much should Andrew deposit in the bank now?

     

    In order to solve this question, what information & formula would Andrew need?

       

    n=5, i=7%, G=60 and ? = ?(? + ? ) �
       

    A1=120, G=30, n=3, i=5% & ? = ? [ ?/ ? − (? / (?+?) ?−?) ]
       

    A1=150, i=8%, G=50, n=4 & ? = ? [ (?+?) ?−? ?(?+?) ? ]
       

    G=210, i=5%, n=3, & ? = ?[ (?+?) ?−? / ? ]
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