Determine the equivalent annual cost of owning a car

Reference no: EM13237848

If the owner earns 5% interest on her investments, determine the equivalent annual cost of owning a car with the following costs (EOY=end of year).

Initial down payment=$2200
Annual payments=$5500, EOY1-EOY4
Prepaid insurance=$1500, growing 8% annually
Gas and oil and minor maintenance-$2000, growing 10% annually
Replacement tires=$650 at EOY4 and $800 at EOY8
Major maintenance=$2400 at EOY5
Salvage vale=$3750 at EOY9

Reference no: EM13237848

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