You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4% annual interest compounded quarterly. You plan on adding to that account with quarterly deposits of $500 each over the next two years.  Then you will take the balance of that account to use as a down payment on your new car.  You expect the car you want will cost $32,000 and that you will be able to get a loan from the dealer at a 12% annual rate for a five-year term. a. How much will you have accumulated for the down payment?

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A: Formula for the future value of annuity is given as:

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A:

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