PLEASE SHOW ALL WORK AND FORMULAS, DON'T USE EXCEL. IF YOU USE A FINANCIAL CALCULATOR PLEASE PUT ALL STEPS FOR ENTERING INTO THE CALCULATOR AND WHICH MODES IT NEEDS TO BE ON.

Question 28 You would like to buy a car but must complete a 2 year commitment to the Peace Corp before you can drive the new car. The current price of the car you want to buy is $25.000 and the dealer expects the price of a similar new car to be $31.250 in 2 years. If you can earn an annual interest rate of 5.00% on your monex should you buy the car now or wait until you return? Why? (Note that storage costs of the car are $0)