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# Answer to Question #58932 in Other Economics for zach

Question #58932
Amanda has bought a second-hand car for $4000 she plans to keep it for 4 years, at the end of which it is likely to fetch$500. if the maintenance cost is $300 per year, and I=8% per year, what is the cars net cost 1 Expert's answer 2016-04-06T09:19:05-0400 The cost per year = maintenance cost + the interest cost. The interest cost of the car:$4000*0.08 = $320 per year Taking into account the maintenance cost, the total annual cost per year:$350+$320 =$670.

The cost per year = $4000/4 + the maintenance cost + the interest cost.$1000 + $350 +$320 = $1670 per year If we factor in the amount Amanda get back after she sells the car, we subtract$500 from what we got in one of the parts above.

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