Answer:
You should deposit 533.33 dollars each month
Step-by-step explanation:
The total amount to be payed after 5 years for the car can be expressed as;
Cost of car after 5 years=Principal amount+Interest amount
where;
Cost of car after 5 years=$32,000
Principal amount=P
Interest amount=Principal×rate×Number of years
Interest amount=P×(6.5/100)×5=0.325 P
replacing;
32,000=P+0.325 p
1.325 P=32,000
P=32,000/1.325
P=24,150.9434
Amount to deposit each year=Total cost of car after 5 years/number of years
where;
Total cost of car after 5 years=$32,000
Number of years=5
replacing;
Amount to deposit per year=32,000/5=$6,400
Amount to deposit each month=Amount to deposit per year/number of months in a year
where;
Amount to deposit per year=$6,400
Number of months in a year=12 months
replacing;
Amount to deposit each month=6,400/12=533.33
You should deposit 533.33 dollars each month
