The Moller Skycar M400 is a flying car known as a personal air vehicle (PAV) that is expected to be FAA- certified by December 31, 2011. The cost is $985,000, and a $100,000 deposit will hold one of the first 100 "cars " Assu me a buver pavs t he pavs tbe

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The Moller Skycar M400 is a flying
car known as a personal air vehicle
(PAV) that is expected to be FAA-
certified by December 31, 2011. The
cost is $985,0o00, and a $100,000
deposit will hold one of the first 100
"cars." Assume a buyer pays the
$885,000 balance 3 years after
making the$100,000 deposit. At an
interest rate of 10% per year, what is
the effective total cost of the PAV in
year 3?
Transcribed Image Text:The Moller Skycar M400 is a flying car known as a personal air vehicle (PAV) that is expected to be FAA- certified by December 31, 2011. The cost is $985,0o00, and a $100,000 deposit will hold one of the first 100 "cars." Assume a buyer pays the $885,000 balance 3 years after making the$100,000 deposit. At an interest rate of 10% per year, what is the effective total cost of the PAV in year 3?
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