Problem #$5$

Altamax Ltd$.,$ a company that manufactures automobile wiring harnesses, has budgeted $P=$$$400,000$ now to pay for a certain type of wire clip over the next $5$ years. If the company expects the cost of the clips to increase by $4\%$ each year, what is the expected cost in year $3$ if the company uses an interest rate of $10\%$ per year?

$-$draw a cash flow diagram with it