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You are trying to decide whether to keep your current car or buy a new car. If you keep your current car you will pay $897 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for 6 years. Alternatively, you can buy a new car and pay $33,921 today and $370 per month (starting next month) on average for maintenance, gas, property tax and insurance. You will make these payments for for 6years.
Problem 1: If your investments earn 3.71% APR (compounded monthly), how much would you save or lose by keeping your current car?
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