Basics of Engineering Economy 2nd Edition by Anthony Tarquin,Leland Blank

Exercise 4

The Moller Skycar M400 is a flying car known as a personal air vehicle (PAV). The cost is $995,000, and a $100,000 deposit holds one of the first 100 vehicles. Assume a buyer pays the $885,000 bal­ance 3 years after making the $100,000 deposit. At an interest rate of 10% per year, determine the ef­fective total cost of the PAV in year 3 using ( a ) bulated factors, and ( b ) single-cell spreadsheet function.