Financial Applications 1. Sarah has recently graduated from community college and has found a job with a good starting salary. Her financial goals include saving enough to buy a used car in 3 years. In addition, she has a $6000 student loan, which she would like to pay off within 10 years. 13 a) She is saving money to buy her car by depositing $200 into a savings account every month. What price of car will she be able to afford if the account earns interest at 3%, compounded monthly? b) What price of car will she be able to afford if her deposits remain at $200, but she finds an investment that pays 6% compounded monthly? 2. A friend wants to sell Sarah his car and is offering a payment plan of $200 monthly for 3 years. The payment plan is a loan at 9% interest, compounded monthly. Her friend would prefer it if Sarah paid a lump sum equivalent to the present value of the payment plan. a) How much less will she pay for the car if she pays in a lump sum instead of accepting the payment plan? b) Why might Sarah prefer the payment plan even though it will cost her more