You are looking to buy a car and own it for five years. A particular model has caught your eye. You could purchase the vehicle brand new for $30,000 and sell the vehicle for $11,000. Regular annual maintenance on the vehicle not covered by the three-year manufacturer warranty is expected to be $200, $800, $1,500, $2,250, and $3,000. Alternatively, you could buy a two-year-old used vehicle for $23,000 and sell it after five years for $6,300. Maintenance costs are expected to be $1,500, $2,250, $3,000, $3,500, and $4,500. The cost of financing is 6.75% compounded monthly. Should you purchase the new or used vehicle? How much will you save in current dollars by picking your chosen alternative?

IN EXCEL WITH EVERY STEP FOR LEARN HOW TO DO IT