Dream Car

Quantitative Finance Level 3

Today is 01-Jan-2015.

Your dream car is going to launch exactly after 5 years from now.

Its estimated price at that time (i.e. After 5 years) will be $ 78,000 (But subject to inflation).

You currently have fixed deposit of $ 42,000 invested in bank which gives you 9% return compounded annually.

How much annual investment starting from today you have to make to buy your dream car.??

Assume inflation rate is 7.25% annually.



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