A farmer purchases a new tractor. General wear and tear make the value of the tractor decrease by 5% per year. The tractor requires 2000$ of maintenance every two years. After five years, the farmer starts putting away 1000$ at the start of each year to purchase a new tractor 5 years from the repair date in a fund earning a 5% annual effective interest rate. At time 10, instead of paying the 2000$ of maintenance, he uses the resale value of his tractor plus the accumulated value in the fund to purchase the same tractor, with its price adjusted to reflect a 1% annual inflation rate.

(a) Draw a timeline of the cash flows.

(b) What was the initial purchase price of the tractor ?