You Want to Purchase a Car for $40,000 When You

question 34

Multiple Choice

You want to purchase a car for $40,000 when you graduate in two years. At that time you will take out a 5-year bank loan at 12% compounded monthly. Based on your estimated earnings, you think you'll be able to afford loan payments of $750 per month. You plan to save up the difference between the cost of the car and the amount you'll borrow by making quarterly deposits over the next two years in a bank account that pays 8% compounded quarterly. How large must those deposits be? (Round to the nearest dollar)

• A)$523
• B)$637
• C)$732
• D)$845

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Definitions:

Transference

In psychoanalysis, the redirection of feelings and desires originally experienced in childhood toward a new object, such as a therapist.

Biological Therapy

Treatment that uses living organisms, substances derived from living organisms, or laboratory-produced versions of such substances to treat disease.

Electroconvulsive Therapy

A medical treatment that involves inducing seizures in patients under anesthesia, primarily used for severe depression and certain psychiatric conditions.

Brain Surgery

A medical procedure involving the treatment or removal of disorders within the brain through an operative approach.