You wish to save for a down payment on a car you can afford

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Reference no: EM13617557

You wish to save for a down payment on a car. You can afford to save $400 each month, which you will place into a savings account at the end of each month. The savings account pays you .25% monthly interest.

(a) How much have you saved at the end of 4 years?

(b) If you need 15% of the purchase price as a down payment, what is the maximum price of the car? Show cash flow diagram from the standpoint of the savings account owner. Show your work and final answer(s).

Reference no: EM13617557

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